Panlong Pharmaceutical: Rules of Procedure for the Board of Directors

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

Shaanxi Panlong Pharmaceutical Group Co., Ltd.

Board of Directors Rules of Procedure

(Month 2025)

Chapter 1 General Provisions

Article 1 In order to clarify the responsibilities and authority of the board of directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd. (hereinafter referred to as the "Company"), standardize the organization and behavior of the board of directors, and ensure the work efficiency and scientific decision-making of the board of directors, these rules are formulated in accordance with the provisions of the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 1 - Standardized Operation of Main Board Listed Companies and the Articles of Association of Shaanxi Panlong Pharmaceutical Group Co., Ltd. (hereinafter referred to as the "Articles of Association").

Article 2 The Board of Directors is a permanent institution of the company, responsible to the shareholders' meeting, implements the resolutions of the shareholders' meeting, safeguards the interests of the company and all shareholders, and is responsible for decision-making on the company's development goals and major operating activities.

Chapter 2 Directors

Article 3 A company director is a natural person. If a director candidate has any of the following circumstances, he shall not be nominated to serve as a company director:

(1) Circumstances under which a director is not allowed to serve as a director as stipulated in the Company Law;

(2) The China Securities Regulatory Commission has taken measures to prohibit entry into the securities market, and the period has not yet expired;

(3) Being publicly determined by the stock exchange to be unfit to serve as a director or senior manager of a listed company, and the period has not yet expired;

(4) Other circumstances stipulated by laws, regulations and the Shenzhen Stock Exchange;

If a director is elected or appointed in violation of the provisions of the preceding paragraph, the election, appointment or appointment shall be invalid. If a director encounters the circumstances described in this article during his term of office, the company will remove him from office and stop him from performing his duties.

If a director candidate has any of the following circumstances, the company shall disclose the specific circumstances and plans of the director candidate:

Rules of Procedure for the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd. Reasons for hiring this candidate and whether it will affect the company's standardized operations:

(1) Received administrative punishment from the China Securities Regulatory Commission within the last 36 months;

(2) Received public condemnation from the stock exchange or three or more notices of criticism from the stock exchange in the past 36 months;

(3) Being investigated by judicial authorities for suspected crimes or being investigated by the China Securities Regulatory Commission for suspected violations of laws and regulations, but no clear conclusion has been reached;

(4) Bad records such as major breach of trust.

The above-mentioned period shall end on the date when the company’s shareholders’ meeting considers the proposal for appointment of director candidates.

Article 4 After being nominated, directors shall self-examine whether they meet the qualifications for office, and promptly provide the company with written explanations and relevant materials on whether they meet the conditions for office.

Candidates should make a written commitment to accept the nomination, promise that the publicly disclosed candidate information is true, accurate, complete and meet the qualifications for office, and ensure that they will effectively perform their duties after being elected.

Article 5 The resume of a director candidate shall include the following content:

(1) Educational background, work experience, part-time work, etc., work status for more than 5% of the company’s shareholders, actual controllers, etc., and status of serving as directors, supervisors, and senior managers in other institutions in the past five years;

(2) Whether there is any related relationship with shareholders, actual controllers, other directors and senior managers of the company who hold more than 5% of the company’s shares;

(3) Holding of the company’s stocks;

(4) Whether it has been punished by the China Securities Regulatory Commission and other relevant departments and disciplinary sanctions by the stock exchange, whether it has been opened for investigation by judicial authorities for suspected crimes or investigated by the China Securities Regulatory Commission for suspected violations of laws and regulations, there is no clear conclusion yet;

(5) Whether it has been included in the list of persons subject to enforcement for dishonesty by the China Securities Regulatory Commission or by the People's Court for illegal and untrustworthy information disclosure in the securities and futures markets;

(6) Other important matters required to be disclosed by the stock exchange.

If the shareholders' meeting elects directors, the relevant proposals shall, in addition to fully disclosing the above information, also explain whether the relevant candidates are prohibited from being nominated as directors and whether they meet the office requirements stipulated in laws and regulations, other provisions of the stock exchange, and the company's articles of association. If a candidate has the relevant circumstances in items (4) and (5), the convener of the shareholders' meeting shall disclose the reasons for recommending the candidate, whether it will have an impact on the standardized operation and corporate governance of the listed company, and the company's response measures.

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

Article 6 The members of the board of directors include representatives of the company’s employees, and the specific establishment matters shall be carried out in accordance with the provisions of the company’s articles of association. The employee representatives on the board of directors are democratically elected by the company's employees through an employee (representative) meeting or other forms, and do not need to be submitted to the shareholders' meeting for review.

Article 7 Directors shall be elected or replaced by the shareholders' meeting, and each term shall be three years. Directors may be re-elected upon expiration of their term of office. Before the expiration of a director's term, the shareholders' meeting cannot remove him from office without reason.

The term of office of a director shall be calculated from the date of taking office until the expiration of the term of the current board of directors. If a director's term of office expires and is not re-elected in time, the original director shall still perform his duties as a director in accordance with the provisions of laws, administrative regulations, departmental rules and the company's articles of association until the re-elected director takes office.

The date on which a director takes office is the day the shareholders' meeting is completed.

Article 8 Directors may concurrently serve as the president or other senior managers, but the total number of directors who concurrently serve as the president or other senior managers and directors who are employee representatives shall not exceed 1/2 of the total number of directors of the company.

Article 9 When a director candidate considers his or her appointment proposal at the shareholders' meeting, the board of directors, or other authorized bodies, he shall attend the meeting in person and explain his/her qualifications, professional abilities, work experience, violations of laws and regulations, whether there is any conflict of interest with the listed company, and his or her relationship with the company's controlling shareholders, actual controllers, other directors, and senior managers.

Article 10 Directors shall abide by laws, administrative regulations and the company's articles of association, take measures to avoid conflicts between their own interests and the company's interests, shall not use their powers to seek improper benefits, and shall have the following loyalty obligations to the company:

(1) Shall not misappropriate the company's property or misappropriate company funds;

(2) Company assets or funds shall not be stored in accounts opened in their own names or in the names of other individuals;

(3) No bribery or other illegal income may be taken advantage of;

(4) Without reporting to the board of directors or the shareholders' meeting, and passing the resolution of the board of directors or the shareholders' meeting in accordance with the company's articles of association, the company shall not directly or indirectly enter into a contract or conduct transactions with the company;

(5) You shall not take advantage of your position to seek business opportunities belonging to the company for yourself or others, unless you report to the board of directors or the shareholders' meeting and pass the resolution of the shareholders' meeting, or the company is unable to take advantage of the business opportunities in accordance with the provisions of laws, administrative regulations or the company's articles of association;

(6) Without reporting to the board of directors or the shareholders' meeting and passing the resolution of the shareholders' meeting, no business of the same type as that of the company may be operated for oneself or for others;

(7) You are not allowed to accept commissions from other people’s transactions with the company as your own;

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

(8) Company secrets shall not be disclosed without authorization;

(9) Shall not use its affiliated relationships to harm the interests of the company;

(10) Other loyalty obligations stipulated in laws, administrative regulations, departmental rules and company articles of association.

The income earned by directors in violation of the provisions of this article shall belong to the company; if they cause losses to the company, they shall bear liability for compensation.

The provisions of Item (4) of Paragraph 2 of this Article shall apply to enterprises that are directly or indirectly controlled by directors or their close relatives, as well as related persons who have other related relationships with directors, when they enter into contracts or conduct transactions with the company. When the board of directors resolves matters stipulated in items (4) to (6) of this article, related directors are not allowed to participate in the voting, and their voting rights are not included in the total number of voting rights. If the number of unrelated directors attending the board meeting is less than three, the matter shall be submitted to the shareholders' meeting for review.

Article 11 Directors shall abide by laws, administrative regulations and the company's articles of association, perform their duties in the best interests of the company and exercise the reasonable care normally due to managers, and have the following diligence obligations towards the company:

(1) The rights granted by the company should be exercised prudently, conscientiously and diligently to ensure that the company’s commercial activities comply with the requirements of national laws, administrative regulations and various national economic policies, and that commercial activities do not exceed the business scope stipulated in the business license;

(2) All shareholders should be treated fairly;

(3) Keep abreast of the company’s business operations and management status;

(4) Written confirmation opinions should be signed on the company’s securities issuance documents and periodic reports. It should ensure that the company discloses information in a timely and fair manner and that the disclosed information is true, accurate and complete;

(5) Relevant information and information shall be truthfully provided to the Audit Committee and shall not hinder the Audit Committee from exercising its powers;

(6) Other diligence obligations stipulated in laws, administrative regulations, departmental rules and the company's articles of association.

If directors and senior managers cannot guarantee the authenticity, accuracy, completeness or objection of the contents of securities issuance documents and periodic reports, they shall express their opinions and state the reasons in a written confirmation opinion, and the issuer shall disclose it. If the issuer refuses to disclose, directors and senior managers may directly apply for disclosure.

If the company's controlling shareholder or actual controller does not serve as a director of the company but actually performs the company's affairs, the

The provisions of Articles 8 and 9.

Article 12 Directors shall ensure that they have sufficient time and energy to perform their duties and fulfill their commitments. The director fails to attend the board meeting in person for two consecutive times and does not entrust other directors to attend the board meeting.

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

If deemed unable to perform its duties, the board of directors shall recommend to the shareholders' meeting that he be removed.

If any of the following circumstances occurs, directors shall make a written explanation and disclose it to the public:

(1) Failure to attend board meetings in person for two consecutive times;

(2) The number of failure to attend board of directors meetings in person for twelve consecutive months during the term of office exceeds one-half of the total number of board of directors meetings during that period.

Article 13 A director who resigns shall submit a written resignation report. Except for the following circumstances, a director's resignation will take effect from the date the company receives the resignation report, and the company will disclose the relevant situation within two trading days:

(1) The resignation of a director causes the number of board members to fall below the legal minimum;

(2) The resignation of independent directors results in the number of independent directors being less than one-third of the board of directors, the proportion of independent directors in its special committees being less than one-half, or there being no accounting professionals among the independent directors. Under the above circumstances, the resignation report shall not take effect until the next director fills the vacancy created by his resignation. Before the resignation report takes effect, the resigning director shall still continue to perform his duties in accordance with relevant laws, regulations and the company's articles of association, except for the circumstances specified in paragraph 1 of Article 3 of these Rules.

If a director proposes to resign, the company shall complete the by-election within 60 days from the date of resignation to ensure that the composition of the board of directors and its special committees complies with laws, regulations and the company's articles of association.

Article 14 Directors shall state in their resignation report the time of resignation, the reason for resignation, the position resigned, whether they will continue to serve in the company and its controlled subsidiaries after resignation (if they continue to serve, explain the circumstances of their continued employment), etc.

Article 15 If a company director encounters any of the circumstances (1) and (2) of Article 3, Paragraph 1 of these Rules during his term of office, the relevant director shall immediately stop performing his duties and the company shall terminate his duties in accordance with corresponding regulations. If a company director encounters any of the circumstances (3) or (4) of Article 3, Paragraph 1 of these Rules during his term of office, the company shall dismiss him or her from office within 30 days from the date of occurrence of such fact.

If the relevant director should be dismissed from his position but has not yet been dismissed, and if he attends and votes at board meetings, special committee meetings, and independent director meetings, his vote will be invalid and will not be counted in the number of attendees.

Article 16 The company shall establish a director resignation management system and clarify the safeguard measures for accountability and compensation for unfulfilled public commitments and other unfulfilled matters. When a director's resignation takes effect or his term expires, he must complete all transfer procedures to the board of directors. His duty of loyalty to the company and shareholders will not be automatically lifted after the end of his term, but will remain valid within [12] months. The responsibilities that a director shall bear due to the performance of his duties during his term of office shall not be exempted or abolished when he leaves office.

After a director leaves office, his or her obligation to keep the company's trade secrets confidential shall remain confidential until the trade secrets become an open letter.

The Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd. will remain valid until the date of the announcement, and obligations agreed with the company such as prohibiting horizontal competition shall be strictly performed.

Article 17 Without the provisions of the company's articles of association or the legal authorization of the board of directors, no director may act on behalf of the company or the board of directors in his or her own name. When a director acts in his own name, if a third party would reasonably believe that the director is acting on behalf of the company or the board of directors, the director shall state his position and identity in advance.

Article 18 A director who has not yet completed his term of office shall be liable for compensation for the losses caused to the company by his absence from office without authorization.

Article 19 If a director violates laws, administrative regulations, departmental rules or the company's articles of association when performing his duties and causes losses to the company, he shall be liable for compensation.

Chapter 2 Composition and Powers of the Board of Directors

Article 20 The company shall have a board of directors, which shall consist of nine directors, of which the proportion of independent directors shall not be less than one-third of the board members. There shall be one chairman, one vice chairman, and one employee representative director. The Chairman and Vice Chairman are elected by the Board of Directors with a majority of all directors.

Article 21 The company's board of directors shall set up an audit committee, and set up relevant special committees such as strategy, nomination, remuneration and assessment as needed. Special committees are responsible to the board of directors and perform their duties in accordance with the company's articles of association and the authorization of the board of directors. Proposals must be submitted to the board of directors for review and decision. The members of the special committees shall all be composed of directors. Among them, the independent directors in the Audit Committee, Nomination Committee, and Remuneration and Appraisal Committee shall constitute the majority and serve as the convener. The convener of the Audit Committee shall be an accounting professional. The board of directors is responsible for formulating work procedures for special committees and standardizing their operations.

Article 22 The board of directors shall exercise the following powers:

(1) Responsible for convening shareholders’ meetings and reporting work to the general meeting;

(2) Implement the resolutions of the shareholders’ meeting;

(3) Determine the company’s business plan and investment plan;

(4) Formulate the company’s profit distribution plan and loss compensation plan;

(5) Formulate plans for the company to increase or reduce its registered capital, issue bonds or other securities, and go public;

(6) Formulate plans for the company’s major acquisitions, acquisition of the company’s stocks, or merger, division, and dissolution plans, as well as plans for changing the company’s form;

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

(7) Within the scope authorized by the shareholders’ meeting, decide on matters such as the company’s external investment, acquisition and sale of assets, asset mortgages, external guarantees, entrusted financial management, related transactions, external donations, etc.;

(8) Decide on the establishment of the company’s internal management organization;

(9) Appoint or dismiss the company’s president, secretary to the board of directors and other senior managers, and decide on their remuneration, rewards and punishments; based on the president’s nomination, decide on the appointment or dismissal of the company’s vice president, chief financial officer and other senior managers, and decide on their remuneration, rewards and punishments;

(10) Formulate the company’s basic management system;

(11) Formulate a plan to amend the company’s articles of association;

(12) Management company information disclosure matters;

(13) Propose to the shareholders’ meeting to hire or change the accounting firm to audit the company;

(14) Listen to the work report of the company president and inspect the president’s work;

(15) Other powers granted by laws, administrative regulations, departmental rules, articles of association or shareholders' meetings. Before the board of directors makes resolutions on the following matters, they must be approved by more than half of all members of the audit committee:

(1) Appoint and dismiss the accounting firm that handles the company’s audit business;

(2) Appoint and dismiss the financial person in charge;

(3) Disclose financial information and internal control evaluation reports in financial accounting reports and periodic reports;

(4) Changes in accounting policies, accounting estimates or correction of major accounting errors due to reasons other than changes in accounting standards;

(5) Other matters stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and the company's articles of association.

Article 23 The way for the board of directors to exercise its powers is to convene a board meeting to review and decide, and the board of directors can only implement the resolution after it is formed. Matters beyond the scope of authorization of the shareholders' meeting shall be submitted to the shareholders' meeting for review. The company's board of directors shall explain to the shareholders' meeting the non-standard audit opinions issued by certified public accountants on the company's financial report.

Article 24 The board of directors shall determine the authority to establish strict review and decision-making procedures for external investment, acquisition and sale of assets, asset mortgages, external guarantees, entrusted financial management, related transactions, external donations, etc. Major investment projects shall organize relevant experts and professionals to conduct reviews and submit them to the shareholders' meeting for approval.

Article 25 When the board of directors considers major transactions, the directors shall understand in detail the reasons for the transaction, carefully evaluate the impact of the transaction on the financial status and long-term development of the listed company, and pay special attention to whether the essence of the related transaction is concealed through the de-relatedness of the transaction and whether it damages the partnership between the company and small and medium-sized shareholders.

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

legal rights and interests.

Article 26 When the board of directors reviews related party transactions, the directors shall make a clear judgment on the necessity, fairness, true intention, and impact of the related party transactions on the listed company, paying special attention to the pricing policy and pricing basis of the transaction, including the fairness of the evaluated value, the relationship between the transaction price of the transaction object and the book value or the evaluated value, etc., strictly abide by the related director avoidance system, and prevent the use of related transactions to regulate profits, transfer benefits to related parties, and damage the legitimate rights and interests of the company and small and medium-sized shareholders.

Article 27 When the board of directors considers major investment matters, the directors shall carefully analyze the feasibility and investment prospects of the investment project, and pay full attention to whether the investment project is related to the main business of the listed company, whether the funding source arrangement is reasonable, whether the investment risk is controllable, and the impact of the matter on the company.

Article 28 Before the board of directors considers the provision of guarantees, the directors shall fully understand the operation and credit status of the guaranteed party, and carefully analyze the financial status, operating status and credit status of the guaranteed party. Directors should make prudent judgments on the compliance and rationality of the guarantee, the guaranteed party's ability to repay debts, and the effectiveness of counter-guarantee measures. When the board of directors considers the guarantee proposal for the company's holding subsidiaries and joint-stock companies, the directors should focus on whether the shareholders of the holding subsidiaries and joint-stock companies provide equal guarantees or counter-guarantees and other risk control measures in accordance with the proportion of their capital contributions.

Article 29 When the board of directors considers matters involving changes in accounting policies, changes in accounting estimates, corrections of major accounting errors, etc., the directors shall pay attention to the rationality of the changes or corrections, the impact on the regularly reported accounting data of the listed company, whether retrospective adjustments are involved, whether it results in a change in the nature of the company's profits and losses in the relevant year, and whether there are any circumstances in which such matters are used to adjust the profits of each period to mislead investors.

Article 30 Before the board of directors considers the provision of financial assistance, the directors should actively understand the basic situation of the funded party, such as the operating and financial status, credit status, tax payment situation, etc. When the board of directors considers the provision of financial assistance, the directors shall make prudent judgments on the compliance and rationality of the financial assistance provided, the repayment ability of the funded party and the effectiveness of the guarantee measures.

Article 31 When the board of directors considers the provision of financial assistance to controlled subsidiaries (excluding controlled subsidiaries within the scope of the listed company's consolidated statements and with a shareholding ratio of more than 50%) and joint-stock companies, the directors shall pay attention to whether other shareholders of the funded object provide financial assistance in proportion to their capital contribution and on equal conditions, whether there are direct or indirect damages to the interests of the listed company, and whether the listed company performs the approval procedures and information disclosure obligations in accordance with regulations.

Article 32 When the board of directors considers the sale or transfer of currently used trademarks, patents, proprietary technologies, franchises and other assets related to the core competitiveness of a listed company, the directors shall pay full attention to whether the matter will damage the legitimate rights and interests of the company and small and medium-sized shareholders, and shall express clear opinions on this matter. The aforementioned opinions shall be recorded in the minutes of the board meeting.

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

Article 33 When the board of directors considers entrusted financial management matters, the directors shall pay full attention to whether the approval power of entrusted financial management is granted to directors or senior managers for personal exercise, whether the relevant risk control systems and measures are sound and effective, and whether the trustee's integrity record, operating conditions and financial status are good.

Article 34 When the board of directors reviews investment matters such as securities investments and derivatives transactions, the directors shall pay full attention to whether the listed company has established a special internal control system, whether the investment risks are controllable and whether the risk control measures are effective, whether the investment scale affects the company's normal operations, whether the source of funds is its own funds, whether there are any investments that violate regulations, etc.

Article 35 When the board of directors considers changes in the use of raised funds, the directors shall pay full attention to the rationality and necessity of the change, and make prudent judgments after fully understanding the feasibility, investment prospects, expected returns, etc. of the post-change project.

Article 36 When the board of directors considers the acquisition and major asset reorganization of a listed company, the directors shall fully investigate the intention of the acquisition or reorganization, pay attention to the credit status and financial status of the acquirer or the counterparty to the reorganization transaction, whether the transaction price is fair and reasonable, whether the acquisition or reorganization is in the overall interests of the company, and prudently assess the impact of the acquisition or reorganization on the company's financial status and long-term development.

Article 37 When the board of directors considers the profit distribution and capital reserve conversion plan, the directors shall pay attention to the compliance and rationality of the plan, and whether it matches the total distributable profits of the listed company, capital adequacy, growth, sustainable development of the company, etc.

Article 38 When the board of directors considers major financing matters, the directors shall pay attention to whether the listed company meets the financing conditions, analyze the pros and cons of various financing methods in light of the company's actual conditions, and reasonably determine the financing methods. If it involves a proposal to issue stocks to a specific object from a related party, special attention should be paid to the reasonableness of the issuance price.

Article 39 When the board of directors reviews the periodic report, the directors shall carefully read the full text of the periodic report, focusing on whether the contents of the periodic report are true, accurate and complete, whether there are any major preparation errors or omissions, whether there are significant fluctuations in major accounting data and financial indicators and whether the explanations for the reasons for the fluctuations are reasonable, whether there are any abnormalities, and whether the discussion and analysis of operating conditions comprehensively analyzes the financial status and operating results of the listed company during the reporting period and fully discloses major events and uncertainties that may affect the company's future financial status and operating results. Directors shall sign a written confirmation of whether the periodic report is true, accurate and complete in accordance with the law, and may not entrust others to sign, nor may they refuse to sign for any reason. If a director cannot guarantee or has objections to the authenticity, accuracy, and completeness of the contents of the periodic report, he shall explain the specific reasons and make an announcement. The board of directors shall explain and make an announcement on the matters involved and their impact on the company.

Article 40 Directors shall strictly implement and urge senior managers to implement resolutions of the shareholders’ meeting, board of directors resolutions and other relevant resolutions. When any of the following situations are discovered during the implementation process, the director shall promptly report to the company's board of directors and request the board of directors to take corresponding measures:

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

(1) There are major changes in the implementation environment, implementation conditions, etc., resulting in the inability to implement relevant resolutions or the continued implementation may cause damage to the company's interests;

(2) The actual implementation is inconsistent with the content of the relevant resolutions, or major risks are discovered during the implementation process;

(3) There is a significant difference between the actual implementation progress and the relevant resolutions, and it will be difficult to achieve the expected goals with continued implementation.

Article 41 Independent directors shall continue to pay attention to the implementation of board resolutions. If they discover that there are violations of laws, regulations, exchange-related regulations, company articles of association, or violations of shareholders' meeting and board of directors resolutions, they shall report to the board of directors in a timely manner, and may request the company to make a written explanation. If disclosure matters are involved, the company shall disclose them in a timely manner. If the company fails to provide an explanation or timely disclosure, the independent directors may report to the exchange.

Chapter 3 Chairman

Article 42 The chairman of the board of directors performs company affairs on behalf of the company and is the legal representative of the company. If the chairman of the board of directors resigns, he shall be deemed to have resigned as the legal representative at the same time. If the legal representative resigns, the company will determine a new legal representative within thirty days from the date of resignation. The establishment and change of the legal representative shall be carried out in accordance with the provisions of the company's articles of association.

The chairman of the board of directors shall actively promote the formulation and improvement of various internal systems of listed companies, strengthen the construction of the board of directors, ensure that the work of the board of directors is carried out normally in accordance with the law, convene and preside over board meetings in accordance with the law, and urge directors to attend board meetings in person.

Article 43 The chairman of the board of directors shall abide by the rules of procedure of the board of directors, ensure the normal convening of board of directors meetings of listed companies, timely submit matters that should be reviewed by the board of directors to the board of directors for review, and shall not restrict or hinder other directors in any form from independently exercising their powers. The chairman of the board of directors shall strictly abide by the collective decision-making mechanism of the board of directors, shall not substitute personal opinions for the board of directors' decision-making, and shall not affect the independent decision-making of other directors.

Article 44 The chairman of the board of directors shall be a director of the company and shall be elected and removed by more than half of all directors.

Article 45 The chairman of the board of directors shall exercise the following powers:

(1) Preside over shareholders’ meetings and convene and preside over board meetings;

(2) Supervise and inspect the implementation of board resolutions;

(3) Other powers granted by the board of directors.

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

The chairman of the board of directors shall not engage in conduct beyond the scope of his authority. When the chairman of the board of directors exercises power within the scope of his duties (including authorization), matters that may have a significant impact on the company's operations should be carefully decided and submitted to the board of directors for collective decision-making when necessary. The chairman of the board of directors shall promptly inform other directors of the implementation status of authorized matters.

Article 46 The chairman of the board of directors shall actively supervise the implementation of the resolutions of the board of directors and promptly inform other directors of the relevant situation. If the actual implementation is inconsistent with the content of the board of directors' resolution, or if major risks are discovered during the implementation process, the chairman of the board of directors shall promptly convene the board of directors to review and take effective measures. The chairman of the board of directors should regularly learn from senior managers about the implementation of board resolutions.

Article 47 If the chairman is unable or fails to perform his duties, the vice chairman shall perform his duties (if the company has two or more vice chairmen, the vice chairman jointly elected by more than half of the directors shall perform his duties); if the vice chairman is unable or fails to perform his duties, more than half of the directors shall jointly elect a director to perform his duties.

Article 48 If the chairman or president resigns during his term of office, the independent directors shall verify the reasons for the resignation of the chairman or president, and express opinions on whether the disclosed reasons are consistent with the actual situation and the impact of the matter on the company. When the independent directors deem it necessary, they may hire an intermediary agency to conduct an out-of-office audit, and the costs shall be borne by the company.

Article 49 The chairman of the board of directors shall ensure the right to know of all directors and the secretary of the board of directors, create good working conditions for them to perform their duties, and shall not obstruct in any form the exercise of their powers in accordance with the law.

Article 50 After receiving a report on a major incident of a listed company, the chairman of the board of directors shall immediately urge the secretary of the board of directors to perform the information disclosure obligations in a timely manner.

Chapter 4 Secretary of the Board of Directors

Article 51 The board of directors shall have a board secretary to handle the daily affairs of the board of directors.

Article 52 The board of directors shall have a board secretary. The secretary of the board of directors is a senior manager of the company and is responsible for the preparation of the company's shareholder meetings and board of directors meetings, document storage, management of the company's shareholder information, and handling of information disclosure matters. The secretary of the board of directors also serves as the head of the board of directors' office and keeps the seal of the board of directors. The secretary of the board of directors may designate securities affairs representatives and other relevant personnel to assist him in handling daily affairs.

The secretary of the board of directors shall abide by the relevant provisions of laws, administrative regulations, departmental rules and the company's articles of association.

Article 53 The secretary of the board of directors shall be nominated by the chairman of the board of directors and appointed or dismissed by the board of directors. A director or other senior executive of a company may concurrently serve as the secretary of the company's board of directors.

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

Article 54 The secretary to the board of directors shall have the necessary financial, management, legal and other professional knowledge to perform his duties, and shall have good professional ethics and personal qualities. Persons with any of the following circumstances shall not serve as secretary of the board of directors;

(1) The circumstances stipulated in the company's articles of association prohibit the person from serving as a director of the company;

(2) Has been subject to administrative penalties from the China Securities Regulatory Commission in the past three years;

(3) It has been publicly condemned by the stock exchange or criticized in three or more notices in the past three years;

(4) Certified public accountants from the accounting firm and lawyers from the law firm hired by the company;

(5) Other circumstances where the stock exchange determines that the person is not suitable to serve as the secretary of the board of directors.

Article 55 The main responsibilities of the secretary of the board of directors are:

(1) Responsible for the company’s information disclosure affairs, coordinate the company’s information disclosure work, organize and formulate the company’s information disclosure management system, and urge the company and relevant information disclosure obligors to comply with relevant regulations on information disclosure;

(2) Responsible for the company’s investor relations management and shareholder information management, and coordinate information communication between the company and securities regulatory agencies, shareholders and actual controllers, sponsor agencies, securities service agencies, media, etc.;

(3) Organize and prepare for board meetings and shareholders’ meetings, participate in shareholders’ meetings, board of directors meetings and senior management-related meetings, and be responsible for recording and signing of board meeting minutes;

(4) Responsible for the confidentiality of the company’s information disclosure, and promptly report and make announcements to the stock exchange when major undisclosed information is leaked;

(5) Pay attention to media reports and take the initiative to verify the true situation, and urge the board of directors to promptly respond to all inquiries from the stock exchange;

(6) Organize directors and senior managers to conduct training on securities laws and regulations, stock exchange listing rules and related regulations, and assist the aforementioned personnel in understanding their respective rights and obligations in information disclosure;

(7) Supervise directors and senior managers to abide by laws, regulations, rules, normative documents, stock exchange stock listing rules and other relevant provisions and the company's articles of association, and earnestly fulfill the commitments they have made; when they learn that the company has made or may make resolutions that violate relevant regulations, they should be reminded and immediately report truthfully to the stock exchange;

(8) Other duties required by the Company Law, Securities Law, China Securities Regulatory Commission and stock exchanges.

As a senior manager of a listed company, the secretary of the board of directors has the right to attend relevant meetings, review relevant documents, and understand company affairs and operations in order to perform his duties. The board of directors and other senior managers should support

Shaanxi Panlong Pharmaceutical Group Co., Ltd. Board of Directors Rules of Procedure and the work of the Board Secretary. No organization or individual may interfere with the normal performance of duties by the Secretary of the Board of Directors.

Article 56 The company shall provide convenient conditions for the board secretary to perform his duties, and directors, senior managers and relevant staff shall support and cooperate with the board secretary's work.

In order to perform his duties, the secretary of the board of directors has the right to understand the company's financial and operating conditions, participate in relevant meetings involving information disclosure, review all documents involving information disclosure, and require relevant departments and personnel of the company to provide relevant materials and information in a timely manner.

Article 57 The company shall sign a confidentiality agreement with the secretary of the board of directors when appointing him, requiring him to promise to continue to perform confidentiality obligations during his term of office and after leaving office until the relevant information is disclosed, except for information involving the company's violations of laws and regulations.

Before leaving office, the secretary of the board of directors shall accept the resignation review of the board of directors and hand over relevant archives and documents and matters currently being handled or to be handled.

After the secretary of the board of directors is dismissed or resigns, he shall still bear the responsibilities of the secretary of the board of directors until he has not fulfilled his reporting and announcement obligations, or has not completed the resignation review, file transfer and other procedures.

During the vacancy of the company's board secretary, the board of directors shall designate a director or senior manager to perform the duties of the board secretary, and at the same time determine the candidate for the board secretary as soon as possible. Before the company appoints a person to act as the secretary to the board of directors, the chairman of the board shall act as the secretary to the board of directors.

If the board secretary is vacant for more than three months, the chairman shall act as the board secretary until the company formally appoints the board secretary.

Chapter 5 Convening of Board of Directors Meeting

Article 58 Board meetings are divided into regular meetings and extraordinary meetings.

Article 59 The board of directors shall hold at least two regular meetings every year, which shall be convened and presided over by the chairman of the board of directors. All directors shall be notified in writing 10 days before the meeting. If the board of directors convenes an extraordinary board meeting, all directors shall be notified at least three days before the meeting.

Article 60 Under any of the following circumstances, the board of directors shall convene and preside over a board meeting within ten days after receiving the proposal:

(1) When proposed by shareholders representing more than one-tenth of the voting rights;

(2) When more than one-third of the directors jointly propose the proposal;

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

(3) When proposed by the audit committee;

(4) When the chairman deems it necessary;

(5) When more than half of the independent directors propose;

(6) Other circumstances stipulated in the company's articles of association.

Article 61 Board meetings shall be convened and held in strict accordance with these rules of procedure, all directors shall be notified in advance as required, and sufficient meeting materials shall be provided, including relevant background materials on the meeting topics, opinions of the special committees of the board of directors (if any), the deliberation status of the meeting attended by all independent directors (if any), and all information, data and materials required for directors to vote on the proposals, respond to inquiries raised by directors in a timely manner, and supplement relevant meeting materials according to the requirements of directors before the meeting.

If a special committee of the board of directors convenes a meeting, the listed company shall, in principle, provide relevant materials and information no later than three days before the special committee meeting.

Meetings of the Board of Directors and its special committees are held and voted through on-site meetings, communications, or a combination of on-site and communications.

In addition to the regular meetings of the board of directors, the meetings of the board of directors and its special committees can also be held in the form of written proposals, that is, resolutions can be made on the proposals by separately delivering them for review or by circulating them for review. Directors or members of the special committees should write down their opinions of agreement, waiver or objection on the resolution. The written resolution may consist of several documents, each of which is signed by one or more directors, members of the special committee, or other directors or members entrusted by them. It is considered legal and valid if the number of people capable of making a resolution of the board of directors or a special committee as stipulated in the company's articles of association is reached. A resolution signed by a director, member of a special committee or other director or member authorized by him or her and sent by email, fax, personal delivery, etc. shall be deemed to have been signed by him/her.

Minutes of meetings of the board of directors and its special committees and special meetings of independent directors shall be produced in accordance with regulations. The minutes shall be true, accurate and complete, and fully reflect the opinions of the participants on the matters discussed.

Article 62 The board of directors meeting shall be convened and presided over by the chairman of the board of directors to examine the implementation of the board of directors' resolutions; if the chairman of the board of directors is unable or fails to perform his duties, a director jointly elected by more than half of the directors shall convene and preside over the meeting.

Article 63 The following matters must be approved by more than half of all independent directors before they can be submitted to the board of directors for review:

(1) Related transactions that should be disclosed;

(2) Plans for the company and relevant parties to change or waive their commitments;

(3) The decisions made and measures taken by the board of directors of the acquired listed company regarding the acquisition;

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

(4) Other matters stipulated in laws and regulations, relevant provisions of the exchange and the company's articles of association.

Article 64 The notice of board meeting shall include the following contents:

(1) Meeting date and location;

(2) Meeting period;

(3) Reasons and issues;

(4) Date of issuance of notice.

Notices of board meetings held by the board of directors shall be delivered in person, by email, by telephone or by fax. The resolutions of the board of directors meeting shall be sent to the directors and relevant participants together with the meeting notice.

Article 65 After the written meeting notice of the regular meeting of the board of directors is issued, if it is necessary to change the time, location and other matters of the meeting or to add, change or cancel the meeting proposals, a written change notice shall be issued three days before the original date of the meeting, explaining the situation and the relevant content of the new proposal and related materials. If it is less than three days, the meeting date shall be postponed accordingly or held as scheduled after obtaining the approval of all directors present.

After the notice of the extraordinary meeting of the board of directors is issued, if it is necessary to change the time, location and other matters of the meeting or to add, change or cancel the meeting proposal, the unanimous approval of all directors shall be obtained after explaining the situation and the relevant content and relevant materials of the new proposal, and corresponding records shall be made.

Article 66 A board meeting must be attended by more than half of the directors. Resolutions made by the board of directors must be approved by more than half of all directors. The voting on resolutions of the board of directors shall be based on one person, one vote.

The non-director president and board secretary shall attend board meetings. Personnel related to the topics discussed shall attend the meeting as necessary. Those attending the meeting have the right to express opinions on relevant issues, but do not have the right to vote.

Article 67: On the premise of ensuring that directors can fully express their opinions, extraordinary meetings of the board of directors may be held by telephone conference, video conference, written signatures, faxes, etc., and resolutions shall be made, and shall be signed by the participating directors.

Article 68 Board meetings shall be attended by the director in person. If a director is unable to attend for any reason, he may entrust another director in writing to attend on his behalf. The power of attorney shall state the name of the agent, matters of agency, authority and validity period, and shall be signed or sealed by the principal. When voting matters are involved, the principal should express his/her consent, objection or abstention for each matter clearly in the letter of authorization. Directors shall not make or accept entrustments without voting intention, full powers or entrustments with unclear scope of authorization. Directors attending meetings on their behalf shall exercise their rights within the scope of authorization. If a director fails to attend a board meeting or appoint a representative to attend, he shall be deemed to have given up his right to vote at the meeting.

Article 69 The following principles shall be followed when entrusting and entrusting persons to attend board meetings:

(1) When reviewing related party transactions, non-related directors shall not entrust related directors to attend on their behalf;

The Shaanxi Panlong Pharmaceutical Group Co., Ltd. Board of Directors Rules of Procedure stipulate that affiliated directors shall not accept entrustment from non-affiliated directors;

(2) Independent directors may not entrust non-independent directors to attend on their behalf, and non-independent directors may not accept entrustment from independent directors;

(3) Directors shall not entrust other directors to attend on their behalf without stating their personal opinions and voting intentions on the proposals, and the relevant directors shall not accept entrustments with full powers or unclear authorization;

(4) A director may not accept the entrustment of more than two directors, nor may a director entrust a director who has accepted the entrustment of two other directors to attend the meeting on his behalf.

Chapter 6 Proposals, Discussions and Voting at Board of Directors Meetings

Article 70 Proposals for regular meetings

Before issuing a notice to convene a regular meeting of the board of directors, the office of the board of directors shall fully solicit the opinions of all directors, initially formulate a proposal for the meeting and submit it to the chairman of the board for formulation;

Before formulating a proposal, the chairman shall seek the opinions of managers and other senior managers as necessary. Board proposals must meet the following conditions:

(1) The content does not conflict with the provisions of laws, regulations, normative documents and the company's articles of association, and falls within the scope of responsibilities of the board of directors;

(2) There are clear topics and specific resolution matters.

Article 71 If a proposal is made to convene an extraordinary meeting of the board of directors, a written proposal signed (sealed) by the proposer shall be submitted through the board of directors office or directly to the chairman of the board of directors. The written proposal should specify the following matters:

(1) The name of the proposer;

(2) Reasons for the proposal or objective reasons on which the proposal is based;

(3) Propose the time or time limit, place and method of holding the meeting;

(4) Clear and specific proposals;

(5) Contact information of the proposer and date of proposal, etc.

The content of the proposal should fall within the scope of authority of the board of directors stipulated in the company's articles of association, and materials related to the proposal should be submitted together.

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

After receiving the above written proposal and relevant materials, the board of directors office shall forward it to the chairman of the board of directors on the same day. If the chairman of the board of directors believes that the content of the proposal is unclear or specific or the relevant materials are insufficient, he may require the proposer to modify or supplement it.

The chairman of the board of directors shall convene a board meeting and preside over the meeting within ten days after receiving the proposal.

Article 72 Directors and the president may propose proposals to the board of directors before the company convenes the board of directors. The proposer shall submit the proposal to the secretary of the board of directors three days before the regular meeting of the board of directors or before the notice of the extraordinary meeting of the board of directors is issued, and the chairman of the board shall decide whether to include the proposal for consideration by the board of directors. If a proposal is submitted to the board of directors in accordance with the above provisions and the chairman of the board decides to include it as a matter for consideration and the board of directors' meeting notice has been issued, the board secretary must issue a change notice in accordance with the relevant provisions of these rules.

If the chairman of the board of directors fails to include the proposal submitted by the proposer in the proposal for consideration by the board of directors, the chairman shall explain the reasons to the proposer. If the proposer does not agree, the board of directors shall decide whether to include it in the proposal for consideration by a vote of more than half of all directors.

Article 73 The chairperson of the meeting shall ask the directors attending the board meeting one by one to express clear opinions on each proposal. For proposals that require prior approval by independent directors according to regulations, the host of the meeting shall designate an independent director to read out the written approval opinions reached by the independent directors before discussing the relevant proposals. If a director repeatedly speaks on the same proposal and his speech exceeds the scope of the proposal, thereby affecting other directors' speeches or hindering the normal progress of the meeting, the meeting moderator shall stop it in a timely manner.

Article 74 Directors shall carefully read relevant meeting materials and express opinions independently and prudently based on a full understanding of the situation.

Directors may obtain the information necessary for decision-making from the board of directors office, meeting convener, president and other senior managers, various special committees, accounting firms, law firms and other relevant persons and institutions before the meeting. They may also suggest to the host during the meeting that representatives of the above-mentioned persons and institutions attend the meeting to explain the relevant situation.

Article 75 After the proposal has been fully discussed, the moderator shall promptly request the directors present to review the proposal one by one.

1. Vote separately.

Voting at the meeting shall be based on one person, one vote, and shall be by written voting such as filling in a voting ticket or by a show of hands.

Directors' voting intentions are divided into consent, opposition and abstention. Directors attending the meeting shall choose one of the above-mentioned intentions. If they fail to make a choice or choose more than two intentions at the same time, the host of the meeting shall require the director concerned to make a new choice. Those who refuse to make a choice shall be deemed to have abstained from voting; those who leave the meeting midway without returning without making a choice shall be deemed to have abstained from voting. If the above situation occurs when a meeting is held in the form of an off-site meeting, the convener of the meeting or the secretary of the board of directors may require the relevant director to re-elect within a reasonable period. Failure to re-elect within a reasonable period will be deemed to have abstained.

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

Article 76 After the voting of the directors present at the meeting is completed, if written voting is adopted, the securities affairs representative and the relevant staff of the board of directors' office shall collect the votes of the directors in a timely manner and submit them to the secretary of the board of directors for statistics under the supervision of an independent director or other directors.

If the meeting is held on-site, the presiding officer of the meeting shall announce the statistical results on the spot; in other cases, the presiding officer of the meeting shall require the secretary of the board of directors to notify the directors of the voting results before the next working day after the end of the specified voting time limit.

If directors vote after the presiding officer of the meeting announces the voting results or after the prescribed voting time limit has expired, their voting results will not be counted.

Article 77 The resolution made by the board of directors must be approved by more than half of all directors. External guarantee matters that should be reviewed and approved by the board of directors, in addition to being approved by a majority of all directors, must also be agreed by more than 2/3 of the directors attending the board meeting and by more than 2/3 of all independent directors. The presiding officer of the meeting shall decide whether the resolution of the board of directors is passed based on the voting results and shall announce the voting results at the meeting. The voting results of the resolution are recorded in the minutes of the meeting.

Article 78 If the presiding officer of the meeting has any doubts about the results of the resolutions submitted for voting, he may count the votes cast; if the presiding officer of the meeting does not count or verify the votes, and the directors present at the meeting have objections to the resolution results announced by the presiding officer, they have the right to request a vote verification immediately after the voting results are announced, and the presiding officer of the meeting shall verify the votes in a timely manner.

Article 79 The board of directors meeting shall have a resolution. All directors present at the meeting shall sign the resolution and bear responsibility for the resolution of the board of directors. The resolutions of the board of directors meeting are kept as company records by the secretary of the board of directors.

If a board resolution violates laws, regulations or articles of association and causes the company to suffer losses, the directors who participated in the resolution shall be liable to the company for compensation. However, if it is proved that the director expressed his dissent during the voting and recorded it in the minutes of the meeting, the director may be exempted from liability. Directors who do not attend the meeting, do not appoint a representative, and do not provide written opinions on the matters discussed at or before the meeting of the board of directors shall be deemed to have expressed no objection and shall not be exempted from liability.

Article 80 The relevant plans and implementation plans passed by the board of directors and the appointment documents of management personnel by the board of directors shall be signed, issued and reported by the chairman of the board.

Article 81 Minutes shall be kept of board meetings, and directors attending the meeting shall sign on the minutes. Directors present at the meeting have the right to request an explanatory record of their speeches at the meeting in the minutes. Minutes of board meetings should be true, accurate and complete, and fully reflect the opinions of participants on the matters discussed. The minutes of board meetings are kept by the secretary of the board of directors as company files. The record of board meetings shall be kept for no less than ten years.

Article 82 The secretary of the board of directors shall arrange for the staff of the board of directors office to attend the board meeting.

The rules of procedure of the board of directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd. are well documented.

Meeting minutes should include the following:

(1) The date, place and name of the convener of the meeting;

(2) The names of directors present and the names of directors (agents) entrusted by others to attend the board of directors;

(3) Meeting agenda;

(4) Key points of the director’s speech;

(5) The voting method and results of each resolution matter (the voting results should indicate the number of votes in favor, against or abstention).

Article 83 The non-director president shall attend board meetings and express opinions on relevant issues, but shall not participate in voting.

Chapter 8 Implementation of Board of Directors Resolutions

Article 84 After the board of directors makes a resolution, the board of directors will distinguish between different situations, or submit relevant matters and plans to the shareholders' meeting for review and approval, or hand over the relevant resolutions to the president to organize management for implementation. The President shall report the performance to the Board of Directors. When the board of directors is not in session, the president may report directly to the chairman of the board, and the board secretary is responsible for transmitting written report materials to the directors.

Article 85 The statutory powers of the board of directors shall be exercised collectively by the board of directors and shall not be authorized to be exercised by others, nor may they be changed or deprived of them by means of the company's articles of association, shareholders' meeting resolutions, etc.

If other powers of the board of directors stipulated in the company's articles of association involve major businesses and matters, collective decision-making and approval shall be implemented, and the chairman, president, etc. shall not be authorized to exercise them.

If the board of directors authorizes the chairman to exercise some of the powers of the board of directors when the board of directors is not in session, the listed company shall clearly stipulate the principles and specific content of the authorization in the company's articles of association.

Chapter 9 Supplementary Provisions

Article 86 These rules shall take effect from the date of passing the resolution of the shareholders' meeting.

Article 87 The board of directors may amend these rules in accordance with relevant laws, regulations and the company's articles of association and submit them to the shareholders' meeting for approval.

Rules of Procedure of the Board of Directors of Shaanxi Panlong Pharmaceutical Group Co., Ltd.

Article 88 Matters not covered in these rules shall be governed by relevant national laws, regulations and the company's articles of association.

Article 89 The Board of Directors is responsible for the interpretation of these rules.