Articles of Association of Heilongjiang Zhenbaodao Pharmaceutical Co., Ltd.
May 2026
Chapter 1 General Provisions
Article 1 In order to safeguard the legitimate rights and interests of the company, shareholders, employees and creditors and regulate the organization and behavior of Heilongjiang Zhenbaodao Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), these Articles of Association are formulated in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law") and other relevant regulations.
Article 2 The company is a joint-stock limited company established in accordance with the Company Law, the Regulations of the People's Republic of China on the Registration and Management of Market Entities and other relevant regulations.
The company was established through sponsorship; it was registered with the Jixi Administration for Industry and Commerce, obtained the "Enterprise Legal Person Business License", and the unified social credit code is 91230300130721906W.
Article 3 The Company was approved by the China Securities Regulatory Commission’s Zhengjianfa [2015] No. 547 document on April 2, 2015, to issue 64.58 million RMB ordinary shares to the public for the first time, and was listed on the Shanghai Stock Exchange (hereinafter referred to as the “Exchange”) on April 24, 2015.
Article 4 Company registered name:
Chinese: Heilongjiang Zhenbaodao Pharmaceutical Co., Ltd.
English: HeiLongJiang ZBD Pharmaceutical Co.,Ltd.
Article 5 Company address: No. 72, Hongxing Street, Hulin Town, Hulin City, Jixi City, Heilongjiang Province. Postal code: 158400
Article 6 The registered capital of the company is RMB 939,403,292.
Article 7 The company shall be a joint stock limited company with permanent existence.
Article 8 The chairman or general manager of a company is the legal representative of the company. If the chairman or general manager who serves as the legal representative resigns, he shall be deemed to have resigned as the legal representative at the same time, and the company shall determine a new legal representative within 30 days from the date of resignation of the legal representative.
Article 9 The legal consequences of civil activities conducted by the legal representative in the name of the company shall be borne by the company.
The restrictions on the powers of the legal representative in this Articles of Association or the shareholders' meeting shall not antagonize bona fide counterparties.
If the legal representative causes damage to others due to the performance of his duties, the company shall bear civil liability. After the company assumes civil liability, it may recover compensation from the at-fault legal representative in accordance with the provisions of the law or these Articles of Association.
Article 10 All assets of a company are divided into equal shares. Shareholders shall bear liability to the company to the extent of the shares they subscribe for, and the company shall bear liability for the company's debts with all of its property.
Article 11 From the effective date of this Articles of Association, it will become a legally binding document that regulates the organization and behavior of the company, the rights and obligations between the company and shareholders, and between shareholders, and is a legally binding document for the company, shareholders, directors, and senior managers. According to this Article of Association, shareholders can sue shareholders, shareholders can sue directors, general managers and other senior managers, shareholders can sue the company, and the company can sue shareholders, directors, general managers and other senior managers.
Article 12 The term “other senior managers” as mentioned in these Articles of Association refers to the company’s deputy general manager, secretary to the board of directors, and financial controller.
Article 13 The company shall establish Communist Party organizations and carry out Party activities in accordance with the provisions of the Constitution of the Communist Party of China. The company provides necessary conditions for the activities of party organizations.
Chapter 2 Business Purpose and Scope
Article 14 The company’s business purpose: everything is for people’s health.
Article 15 After registration in accordance with the law, the company's business scope: Licensed items: pharmaceutical production; pharmaceutical commissioned production; pharmaceutical wholesale; pharmaceutical retail; production of medical masks; production of protective equipment for medical staff (Class II medical devices); production of Class II medical devices; road cargo transportation (excluding dangerous goods); import and export of pharmaceuticals. General projects: purchase of Chinese herbal medicines; purchase and sale of real estate Chinese herbal medicines (excluding Chinese herbal medicine pieces); purchase of primary agricultural products; production of daily masks (non-medical); sales of daily masks (non-medical); retail of medical masks; production of first-class medical devices; sales of first-class medical devices; sales of second-class medical devices; wholesale of medical masks; bidding agency services; import and export of goods; import and export of technology; technical services, technology development, technical consultation, technology exchange, technology transfer, and technology promotion. (Projects that require approval according to law can only be carried out with the approval of relevant departments. Specific business projects shall be subject to the approval documents or licenses of relevant departments)
Chapter 3 Shares
Section 1 Share Issuance
Article 16 The company's shares shall be in the form of stocks.
Article 17 The issuance of company shares shall be based on the principles of fairness and impartiality, and each share of the same category shall have equal rights.
For shares of the same type issued at the same time, the issuance conditions and price for each share shall be the same; for shares subscribed by any unit or individual, the same price shall be paid for each share.
Article 18 The face value of the par value shares issued by the company shall be expressed in RMB.
Article 19 The shares issued by the company shall be centrally deposited at the Shanghai Branch of China Securities Depository and Clearing Co., Ltd.
Article 20 The company is an overall change and establishment of Heilongjiang Zhenbaodao Pharmaceutical Co., Ltd.
The company's sponsors are Heilongjiang Chuangda Group Co., Ltd. and Bozhou Junze Fanglong Equity Investment Center (Limited Partnership). On the day of establishment, the company issued 200 million RMB ordinary shares to the promoters, accounting for 100% of the company's total issued ordinary shares. Among them, Heilongjiang Chuangda Group Co., Ltd. subscribed for 160 million shares with net assets, accounting for 80% of the total share capital; Bozhou Junze Fanlong Equity Investment Center (Limited Partnership) subscribed for 40 million shares with net assets, accounting for 20% of the total share capital.
Article 21 The total number of shares of the company is 939,403,292 shares, all of which are ordinary shares.
Article 22 The company or its subsidiaries (including the company's affiliated enterprises) shall not provide financial assistance for others to obtain shares of the company or its parent company in the form of gifts, advances, guarantees, loans, etc., unless the company implements an employee stock ownership plan.
For the benefit of the company, upon resolution of the shareholders' meeting, or the board of directors making a resolution in accordance with the Articles of Association or the authorization of the shareholders' meeting, the company may provide financial assistance to others to acquire shares of the company or its parent company, but the cumulative total of financial assistance shall not exceed 10% of the total issued share capital. Resolutions made by the board of directors must be approved by more than 2/3 of all directors.
Section 2 Increase, decrease and repurchase of shares
Article 23 According to the needs of operation and development, in accordance with the provisions of laws and regulations, and after the shareholders' meeting makes separate resolutions, the company may increase its registered capital in the following ways:
(1) Issuance of shares to unspecified objects;
(2) Issuance of shares to specific objects;
(3) Distribute bonus shares to existing shareholders;
(4) Convert public reserve funds into share capital;
(5) Other methods stipulated by laws, administrative regulations and the China Securities Regulatory Commission.
Article 24 A company may reduce its registered capital. When a company reduces its registered capital, it shall comply with the procedures stipulated in the Company Law, other relevant laws and regulations, and these Articles of Association.
Article 25 A company may not acquire its own shares. However, except for one of the following circumstances:
(1) Reduce the company’s registered capital;
(2) Merge with other companies that hold shares of the company;
(3) Use shares for employee stock ownership plans or equity incentives;
(4) A shareholder requests the company to acquire his or her shares because he or she dissents from the company's merger or division resolution made by the shareholders' meeting;
(5) Use the shares to convert corporate bonds issued by the company that can be converted into stocks;
(6) Necessary for the company to maintain the company's value and shareholders' rights and interests.
Article 26 A company may acquire its own shares through public centralized transactions or other methods approved by laws, administrative regulations and the China Securities Regulatory Commission.
If the company acquires the company's shares due to the reasons specified in Items (3), (5) and (6) of Article 25 of this Article, it shall do so through public centralized transactions.
If the company acquires the company's shares due to the reasons for items (1) and (2) of Article 25 of this Article, it must be resolved by the shareholders' meeting; if the company purchases the company's shares for the reasons of items (3), (5) and (6) of Article 25 of this Article, it must be resolved by a board meeting attended by more than two-thirds of the directors.
After the company acquires the company's shares in accordance with the provisions of Article 25 of the Articles, if it falls under the circumstances of item (1), it shall cancel it within 10 days from the date of acquisition; if it falls under the circumstances of items (2) and (4), it shall transfer or cancel it within 6 months; if it falls under the circumstances of items (3), (5), and (6), the total number of shares of the company held by the company shall not exceed 10% of the total number of issued shares of the company, and shall be canceled within 3 Transfer or cancel within the year.
Section 3 Share Transfer
Article 27 The company's shares shall be transferred in accordance with the law.
Article 28 The company does not accept its own shares as the subject of pledge.
Article 29 The shares issued before the company's public issuance of shares shall not be transferred within one year from the date the company's shares are listed and traded on the stock exchange.
Directors and senior managers of a company shall report to the company the shares they hold in the company and their changes. The shares transferred each year during the term of office determined at the time of taking office shall not exceed 25% of the total number of shares of the same class held by them; the shares held by the company shall not be transferred within 1 year from the date of listing and trading of the company's shares. The above-mentioned personnel shall not transfer the shares of the company held by them within six months after their resignation.
Article 30 If directors, senior managers, or shareholders holding more than 5% of the company's shares sell the company's stocks or other equity securities they hold within 6 months after buying them, or buy them again within 6 months after selling them, the proceeds will belong to the company, and the company's board of directors will take back the proceeds. However, securities companies holding more than 5% of the shares due to the purchase of remaining stocks after the package sale are excluded, as well as other circumstances stipulated by the China Securities Regulatory Commission.
The stocks or other securities with an equity nature held by directors, senior managers, and natural person shareholders as mentioned in the preceding paragraph include stocks or other securities with an equity nature held by their spouses, parents, and children and those held using the accounts of others.
If the company's board of directors fails to implement the provisions of paragraph 1 of this article, the shareholders have the right to request the board of directors to implement it within 30 days. If the company's board of directors fails to implement the decision within the above time limit, shareholders have the right to file a lawsuit directly with the People's Court in their own name for the benefit of the company.
If the company's board of directors fails to comply with the provisions of paragraph 1, the responsible directors shall bear joint and several liability in accordance with the law.
Chapter 4 Shareholders and Shareholders’ Meeting
Section 1 Shareholders
Article 31 The company shall establish a shareholder list based on the certificates provided by the securities registration agency. The shareholder list is sufficient evidence to prove that shareholders hold the company's shares. Shareholders enjoy rights and assume obligations according to the class of shares they hold; shareholders holding the same class of shares enjoy the same rights and assume the same obligations.
Article 32 When a company convenes a shareholders' meeting, distributes dividends, liquidates, or engages in other actions that require confirmation of the identity of shareholders, the board of directors or the convener of the shareholders' meeting shall determine the equity registration date. Shareholders registered after the market close on the equity registration date shall be shareholders who enjoy relevant rights and interests.
Article 33 Shareholders of the company enjoy the following rights:
(1) Receive dividends and other forms of benefit distribution based on the share of shares held;
(2) Request to convene, convene, host, participate in, or appoint shareholders’ agents to participate in shareholders’ meetings in accordance with the law, and exercise corresponding voting rights;
(3) Supervise the company’s operations and make suggestions or inquiries;
(4) Transfer, donate or pledge the shares it holds in accordance with the provisions of laws, administrative regulations and these Articles of Association;
(5) Inspect and copy the Articles of Association, shareholder list, minutes of shareholders’ meetings, board meeting resolutions, and financial accounting reports. Shareholders who individually or collectively hold more than 3% of the company’s shares for more than 180 consecutive days and comply with the provisions of laws and administrative regulations such as the Securities Law may inspect the company’s accounting books and accounting vouchers;
(6) When the company is terminated or liquidated, participate in the distribution of the company's remaining property according to the share of shares it holds;
(7) Shareholders who object to the company merger or division resolution made by the shareholders' meeting require the company to acquire their shares;
(8) Other rights stipulated in laws, administrative regulations, departmental rules or this Charter.
Article 34 Shareholders who request to review or copy company-related materials must comply with the provisions of the Company Law, Securities Law and other laws and administrative regulations. If a shareholder requests to review the relevant information or request materials mentioned in the preceding article, he shall provide the company with written documents proving the type and number of shares he holds in the company, and the company will provide it according to the shareholder's request after verifying the shareholder's identity.
Article 35 If the resolutions of the company’s shareholders’ meeting or board of directors violate laws and administrative regulations, shareholders have the right to request the People’s Court to invalidate them.
If the convening procedures and voting methods of the shareholders' meeting or the board of directors violate laws, administrative regulations or the Articles of Association, or the content of the resolution violates the Articles of Association, shareholders have the right to request the People's Court to revoke the resolution within 60 days from the date the resolution is made. However, there are only minor flaws in the convening procedures or voting methods of the shareholders' meeting or the board of directors' meeting, which do not have a substantial impact on the resolution.
If the board of directors, shareholders and other relevant parties have disputes over the validity of the resolutions of the shareholders' meeting, they should promptly file a lawsuit with the people's court. Before the people's court makes a judgment or ruling such as revoking the resolution, the relevant parties should implement the resolutions of the shareholders' meeting, and the company, directors and senior managers should effectively perform their duties and ensure the normal operation of the company.
If the people's court makes a judgment or ruling on relevant matters, the company shall perform its information disclosure obligations in accordance with laws, administrative regulations, the provisions of the China Securities Regulatory Commission and the stock exchange, fully explain the impact, and actively cooperate with the implementation after the judgment or ruling takes effect. If it involves the correction of previous matters, it will be handled in a timely manner and the corresponding information disclosure obligations will be fulfilled.
Article 36 If any of the following circumstances occurs, the resolution of the company’s shareholders’ meeting or board of directors shall be invalid:
(1) No shareholders’ meeting or board of directors meeting was held to make resolutions;
(2) The shareholders’ meeting and the board of directors’ meeting did not vote on resolution matters;
(3) The number of people attending the meeting or the number of voting rights held does not reach the number or number of voting rights stipulated in the Company Law or these Articles of Association;
(4) The number of people or the number of voting rights they hold who agree to the resolution does not reach the number of people or the number of voting rights they hold as stipulated in the Company Law or these Articles of Association.
Article 37 If directors or senior managers other than members of the audit committee violate laws, administrative regulations or the provisions of these Articles of Association when performing their duties and cause losses to the company, shareholders who individually or jointly hold more than 1% of the company's shares for more than 180 consecutive days have the right to request the audit committee to file a lawsuit in the People's Court in writing; if members of the audit committee violate laws, administrative regulations or the provisions of these Articles of Association when performing their duties and cause losses to the company, shareholders may request the board of directors in writing to file a lawsuit in the People's Court.
If the audit committee or the board of directors refuses to file a lawsuit after receiving the written request from the shareholder specified in the preceding paragraph, or fails to file a lawsuit within 30 days from the date of receipt of the request, or the situation is urgent and failure to file a lawsuit immediately will cause irreparable damage to the company's interests, the shareholder specified in the preceding paragraph has the right to file a lawsuit directly with the People's Court in its own name for the benefit of the company.
If others infringe upon the company's legitimate rights and interests and cause losses to the company, the shareholders specified in the first paragraph of this article may file a lawsuit with the People's Court in accordance with the provisions of the previous two paragraphs.
If directors or senior managers of a wholly-owned subsidiary of a company violate the provisions of laws, administrative regulations or these Articles of Association when performing their duties, or if others infringe upon the legitimate rights and interests of a wholly-owned subsidiary of the company and cause losses, shareholders who individually or collectively hold more than 1% of the company's shares for more than 180 consecutive days may request in writing the board of directors of the wholly-owned subsidiary to file a lawsuit with the People's Court in accordance with Article 189 of the Company Law or directly file a lawsuit with the People's Court in their own name.
Article 38 If directors or senior managers violate laws, administrative regulations or the provisions of these Articles of Association and harm the interests of shareholders, shareholders may file a lawsuit in the People's Court.
Article 39 The shareholders of the company shall bear the following obligations:
(1) Comply with laws, administrative regulations and this charter;
(2) Pay the share price according to the shares subscribed and the method of subscription;
(3) Except under circumstances stipulated by laws and regulations, its share capital shall not be withdrawn;
(4) A shareholder shall not abuse the rights of a shareholder to harm the interests of the company or other shareholders; shall not abuse the independent status of a company as a legal person and the limited liability of shareholders to damage the interests of the creditors of the company; a shareholder of a company who abuses the rights of a shareholder to cause losses to the company or other shareholders shall bear liability for compensation in accordance with the law; a shareholder of a company who abuses the independent status of a legal person of a company and the limited liability of shareholders to evade debts and seriously damage the interests of creditors of the company shall bear joint and several liability for the debts of the company;
(5) Other obligations stipulated in laws, administrative regulations and this Articles of Association.
Section 2 Controlling Shareholders and Actual Controllers
Article 40 The company's controlling shareholders and actual controllers shall exercise their rights and perform their obligations in accordance with laws, administrative regulations, the provisions of the China Securities Regulatory Commission and the stock exchange, and safeguard the interests of the listed company.
Article 41 The company’s controlling shareholders and actual controllers shall comply with the following provisions:
(1) Exercise shareholders’ rights in accordance with the law, and do not abuse control rights or use affiliated relationships to damage the legitimate rights and interests of the company or other shareholders;
(2) Strictly implement the public statements and commitments made, and shall not make any changes or exemptions without authorization;
(3) Perform information disclosure obligations in strict accordance with relevant regulations, actively cooperate with the company in information disclosure, and promptly inform the company of major events that have occurred or are expected to occur;
(4) Company funds shall not be appropriated in any way;
(5) The company and relevant personnel shall not be forced, instigated or required to provide guarantees in violation of laws and regulations;
(6) Not to use the company's undisclosed major information to seek benefits, not to leak any undisclosed major information related to the company in any way, and not to engage in insider trading, short-term trading, market manipulation and other illegal activities;
(7) The legitimate rights and interests of the company and other shareholders shall not be harmed through unfair related transactions, profit distribution, asset restructuring, external investment, etc. in any way;
(8) Ensure the company’s asset integrity, personnel independence, financial independence, organizational independence and business independence, and shall not affect the company’s independence in any way;
(9) Other provisions of laws, administrative regulations, regulations of the China Securities Regulatory Commission, business rules of stock exchanges and these Articles of Association.
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 provisions of this Articles of Association regarding directors' duties of loyalty and diligence shall apply.
If a company's controlling shareholder or actual controller instructs a director or senior manager to engage in behavior that damages the interests of the company or shareholders, he shall be jointly and severally liable with the director or senior manager.
Article 42 When a controlling shareholder or actual controller misappropriates the company's assets and harms the interests of the company and public shareholders, the company's board of directors shall take effective measures to require the controlling shareholder to stop the infringement and bear liability for compensation for the losses caused by the infringement. When directors and senior managers of a company assist or connive at controlling shareholders and their affiliated companies to misappropriate the company's assets, the company's board of directors will impose sanctions on those directly responsible based on the severity of the case. Directors who bear serious responsibilities may be submitted to the shareholders' meeting for removal.
The company applies the "occupation and freezing" mechanism to the company's shares held by the controlling shareholder, that is, if the controlling shareholder is found to have misappropriated the company's assets, it will immediately apply for judicial freezing. If the company cannot be repaid in cash, the misappropriated assets will be repaid by liquidating the equity. The person in charge of the company's financial affairs is the specific person responsible for the "occupancy and freezing" mechanism. Once the company's financial director discovers that the company's controlling shareholder or actual controller and its affiliated companies have misappropriated the company's assets, he should immediately initiate the following procedures:
(1) On the day when the company’s financial director discovers that the controlling shareholder has embezzled the company’s assets, he should report in writing to the chairman of the company and send a copy to the secretary of the board of directors; if it is discovered that the company’s directors and senior managers have assisted or connived at the controlling shareholder and its affiliated enterprises to embezzle the company’s assets, the financial person in charge should also indicate in the written report the names of the directors or senior managers involved and the circumstances of assisting or conniving at the controlling shareholder and its affiliated enterprises to embezzle the company’s assets;
(2) After receiving the report from the financial controller, the chairman of the board of directors should immediately convene a board meeting to review the time limit for repayment from the controlling shareholder, apply to the relevant judicial departments for freezing the shares of the controlling shareholder, and other related matters; if there is a situation where the company's directors and senior managers assist or condone the controlling shareholder and its affiliated companies to misappropriate the company's assets, the company's board of directors should, depending on the severity of the case, punish the person directly responsible and request the shareholders' meeting to remove directors who bear serious responsibilities.
(3) The secretary of the board of directors shall send a time-limited repayment notice to the controlling shareholder in accordance with the resolution of the board of directors, implement the disciplinary decision on the relevant directors or senior managers, apply to the relevant judicial departments for freezing the shares of the controlling shareholder and other related matters, and do a good job in relevant information disclosure.
(4) If the controlling shareholder is unable to repay within the stipulated period, the company shall apply to the relevant judicial department within 30 days after the expiration of the stipulated period to liquidate the frozen shares to repay the misappropriated assets, and the board secretary shall do a good job in disclosing relevant information.
Article 43 If a controlling shareholder or actual controller pledges the company's stocks held or actually controlled by him or her, the company's control rights and production and operation stability shall be maintained.
Article 44 When controlling shareholders and actual controllers transfer the shares of the company they hold, they must comply with the restrictive provisions on share transfers in laws, administrative regulations, regulations of the China Securities Regulatory Commission and stock exchanges, and the commitments they have made to restrict share transfers.
Section 3 General Provisions of Shareholders’ Meetings
Article 45 The company’s shareholders’ meeting shall be composed of all shareholders. The shareholders' meeting is the company's authority and exercises the following powers in accordance with the law:
(1) Elect and replace directors who are not employee representatives, and decide on remuneration matters for directors;
(2) Review and approve the report of the board of directors;
(3) Review and approve the company’s profit distribution plan and loss compensation plan;
(4) Make a resolution to increase or decrease the company’s registered capital;
(5) Make a resolution on the issuance of corporate bonds;
(6) Make resolutions on the merger, division, dissolution, liquidation or change of company form;
(7) Modify this Articles of Association;
(8) Make a resolution on the company’s hiring and dismissal of the accounting firm that handles the company’s audit business;
(9) Review and approve the guarantee matters stipulated in Article 46 and the financial assistance matters stipulated in Article 47;
(10) Review the company’s purchase and sale of major assets within one year exceeding 30% of the company’s latest audited total assets;
(11) Review and approve changes in the use of raised funds;
(12) Review equity incentive plans and employee stock ownership plans;
(13) Review other matters that should be decided by the shareholders’ meeting as stipulated in laws, administrative regulations, departmental rules or these Articles of Association.
The shareholders' meeting can authorize the board of directors to make a resolution on the issuance of corporate bonds.
Article 46 The following external guarantees of the company shall be reviewed and approved by the shareholders’ meeting:
(1) Any guarantee provided after the total external guarantees of the company and its controlled subsidiaries exceed 50% of the latest audited net assets;
(2) Any guarantee provided after the total external guarantees of the company and its controlled subsidiaries exceed 30% of the latest audited total assets;
(3) Based on the cumulative calculation principle of the guarantee amount within 12 consecutive months, the amount of guarantee provided to others exceeds 30% of the company’s latest audited total assets;
(4) Guarantees provided for guarantee objects whose asset-liability ratio exceeds 70%;
(5) A single guarantee amount exceeds 10% of the latest audited net assets;
(6) Guarantees provided to shareholders, actual controllers and their related parties.
If the company's directors, senior managers or other relevant personnel fail to conduct examination and approval in accordance with the prescribed procedures, or sign an external guarantee contract without authorization or exceed their authority, or neglect to perform their duties and cause losses to the company, the company shall hold the relevant responsible persons accountable.
Article 47 The following acts of providing financial assistance by the company shall be reviewed and approved by the shareholders’ meeting:
(1) The amount of a single financial aid exceeds 10% of the company’s latest audited net assets;
(2) The latest financial statement data of the funded object shows that the asset-liability ratio exceeds 70%;
(3) The cumulative amount of financial assistance in the last 12 months exceeds 10% of the company’s latest audited net assets;
(4) Other situations stipulated in laws, regulations and regulatory documents.
If the funding object is a controlled subsidiary within the scope of the company's consolidated statements, and the other shareholders of the controlled subsidiary do not include the listed company's controlling shareholders, actual controllers and their related parties, the provisions of the preceding paragraph may be exempted from application.
Article 48 Shareholders' meetings are divided into annual shareholders' meetings and extraordinary shareholders' meetings. The annual shareholders' meeting is held once a year and should be held within 6 months after the end of the previous fiscal year.
Article 49 If any of the following circumstances occurs, the company shall convene an extraordinary shareholders' meeting within 2 months from the date of occurrence:
(1) When the number of directors is less than 2/3 of the number specified in the Company Law or the number specified in these Articles of Association;
(2) When the company’s uncompensated losses reach 1/3 of the total paid-in share capital;
(3) When requested by shareholders individually or collectively holding more than 10% of the company’s shares;
(4) When the board of directors deems it necessary;
(5) When the audit committee proposes to convene;
(6) Other situations stipulated in laws, administrative regulations, departmental rules or this Article.
Article 50 The place where the company convenes the shareholders’ meeting shall be the company’s domicile or other place determined by the convener of the shareholders’ meeting and specified in the notice of the shareholders’ meeting.
The shareholders' meeting will set up a venue and be held in the form of an on-site meeting. The company will also provide online voting to facilitate shareholders' participation in the shareholders' meeting. In addition to setting up a meeting venue and holding it in person, the shareholders' meeting can also be held using electronic communication methods. Shareholders who participate in the shareholders' meeting through the above methods are deemed to be present.
Article 51 When convening a shareholders' meeting, the company will hire a lawyer to issue legal opinions on the following issues and make an announcement:
(1) Whether the convening and convening procedures of the meeting comply with laws, administrative regulations, and these Articles of Association;
(2) Whether the qualifications of the persons attending the meeting and the qualifications of the convener are legal and valid;
(3) Whether the voting procedures and voting results of the meeting are legal and valid;
(4) Legal opinions on other relevant issues at the request of the company.
Section 4: Convening of Shareholders’ Meeting
Article 52 The board of directors shall convene the shareholders’ meeting on time within the prescribed time limit.
With the approval of more than half of all independent directors, the independent directors have the right to propose to the board of directors to convene an extraordinary shareholders' meeting. Regarding the independent directors' proposal to convene an extraordinary shareholders' meeting, the board of directors shall provide written feedback on whether it agrees or disagrees to convene an extraordinary shareholders' meeting within 10 days after receiving the proposal in accordance with the provisions of laws, administrative regulations and these Articles of Association.
If the board of directors agrees to convene an extraordinary shareholders' meeting, it will issue a notice to convene the shareholders' meeting within 5 days after making the board resolution; if the board of directors does not agree to convene an extraordinary shareholders' meeting, it will explain the reasons and make an announcement.
Article 53 The Audit Committee has the right to propose to the Board of Directors to convene an extraordinary shareholders' meeting, and shall propose it to the Board of Directors in writing. The board of directors shall provide written feedback on whether it agrees or disagrees to convene an extraordinary shareholders' meeting within 10 days after receiving the proposal in accordance with the provisions of laws, administrative regulations and these Articles of Association.
If the board of directors agrees to convene an extraordinary shareholders' meeting, it shall issue a notice to convene the shareholders' meeting within 5 days after making the board resolution. Any changes to the original proposal in the notice must be approved by the audit committee.
If the board of directors does not agree to convene an extraordinary shareholders' meeting, or fails to provide feedback within 10 days after receiving the proposal, it will be deemed that the board of directors is unable or fails to perform its duty to convene a shareholders' meeting, and the audit committee may convene and preside over it on its own.
Article 54 Shareholders who individually or collectively hold more than 10% of the company's shares have the right to request the board of directors to convene an extraordinary shareholders' meeting, and shall submit the request to the board of directors in writing. The board of directors shall provide written feedback on whether it agrees or disagrees to convene an extraordinary shareholders' meeting within 10 days after receiving the request in accordance with the provisions of laws, administrative regulations and these Articles of Association.
If the board of directors agrees to convene an extraordinary shareholders' meeting, it shall issue a notice to convene the shareholders' meeting within 5 days after making the board resolution. Any changes to the original request in the notice must obtain the consent of the relevant shareholders.
If the board of directors does not agree to convene an extraordinary shareholders' meeting, or fails to provide feedback within 10 days after receiving the request, shareholders individually or collectively holding more than 10% of the company's shares have the right to propose to the audit committee to convene an extraordinary shareholders' meeting, and shall submit the request to the audit committee in writing.
If the audit committee agrees to convene an extraordinary shareholders' meeting, it shall issue a notice of convening the shareholders' meeting within 5 days of receiving the request. Any changes to the original request in the notice must be approved by the relevant shareholders.
If the audit committee fails to issue a shareholders' meeting notice within the prescribed period, it will be deemed that the audit committee has not convened and presided over the shareholders' meeting. Shareholders who individually or collectively hold more than 10% of the company's shares for more than 90 consecutive days may convene and preside over it on their own.
Article 55 If the audit committee or shareholders decide to convene a shareholders' meeting on their own, they shall notify the board of directors in writing and file the same with the Shanghai Stock Exchange.
Before the resolution of the shareholders' meeting is announced, the shareholding ratio of the convening shareholders shall not be less than 10%.
The audit committee or convening shareholders shall submit relevant supporting materials to the Shanghai Stock Exchange when issuing the notice of the shareholders' meeting and the announcement of the resolutions of the shareholders' meeting.
Article 56 For shareholders’ meetings convened by the audit committee or shareholders themselves, the board of directors and the board secretary shall cooperate, provide necessary support, and perform information disclosure obligations in a timely manner. The board of directors shall provide a shareholder list on the equity registration date, and the shareholder list obtained by the convener shall not be used for any purpose other than convening a shareholders' meeting.
Article 57 For a shareholders' meeting convened by the audit committee or shareholders themselves, the necessary expenses for the meeting shall be borne by the company.
Section 5 Proposals and Notices of Shareholders’ Meetings
Article 58 The content of the proposal shall fall within the scope of the shareholders' meeting, have clear topics and specific resolution matters, and comply with the relevant provisions of laws, administrative regulations and these Articles of Association.
Article 59 When a company convenes a shareholders' meeting, the board of directors, audit committee and shareholders individually or jointly holding more than 1% of the company's shares have the right to submit proposals to the company.
Shareholders who individually or collectively hold more than 1% of the company's shares may put forward a temporary proposal 10 days before the shareholders' meeting and submit it in writing to the convener. The convener shall issue a supplementary notice to the shareholders' meeting within 2 days after receiving the proposal, announce the contents of the temporary proposal, and submit the temporary proposal to the shareholders' meeting for review. Exceptions are made for temporary proposals that violate laws, administrative regulations or the provisions of these Articles of Association, or do not fall within the scope of the shareholders' meeting.
Except for the circumstances specified in the preceding paragraph, the convener shall not modify the proposals listed in the notice of shareholders' meeting or add new proposals after issuing the notice of shareholders' meeting.
Proposals that are not listed in the notice of the shareholders' meeting or do not comply with the provisions of this article of the Articles of Association shall not be voted on and resolutions made by the shareholders' meeting.
Article 60 The convener shall notify all shareholders by announcement 20 days before the annual shareholders' meeting, and the extraordinary shareholders' meeting shall notify each shareholder by announcement 15 days before the meeting.
When the company calculates the starting period, it does not include the day of the meeting.
Article 61 The notice of shareholders’ meeting shall include the following contents:
(1) Time, place and duration of the meeting;
(2) Matters and proposals submitted to the meeting for consideration;
(3) Explain in obvious words: All shareholders have the right to attend the shareholders’ meeting and may appoint a proxy in writing to attend the meeting and participate in voting. The shareholder’s proxy does not have to be a shareholder of the company;
(4) Equity registration date of shareholders who have the right to attend the shareholders’ meeting;
(5) Name and telephone number of the permanent contact person for conference affairs;
(6) Voting time and voting procedures online or by other means.
All specific contents of all proposals shall be fully and completely disclosed in the shareholders' meeting notice and supplementary notice. If the matters to be discussed require the independent directors to express their opinions, the opinions and reasons of the independent directors will be disclosed when issuing the shareholders' meeting notice or supplementary notice.
If the shareholders' meeting provides online voting, it shall be held on a trading day of the Shanghai Stock Exchange, and the end time of the on-site meeting shall not be earlier than the end time of online voting. The start time of voting online or by other means at the shareholders' meeting shall not be earlier than 3:00 pm on the day before the on-site shareholders' meeting, and shall not be later than 9:30 am on the day of the on-site shareholders' meeting, and its end time shall not be earlier than 3:00 pm on the day when the on-site shareholders' meeting ends.
The interval between the equity registration date and the meeting date should be no more than 7 working days. Once the equity registration date is confirmed, it cannot be changed.
Article 62 If the shareholders’ meeting intends to discuss the election of directors, the notice of the shareholders’ meeting shall fully disclose the detailed information of the director candidates, including at least the following:
(1) Educational background, work experience, part-time job and other personal information;
(2) Whether there is a related relationship with the company or the company’s controlling shareholder and actual controller;
(3) Disclose the number of shares held in the company;
(4) Whether you have been punished by the China Securities Regulatory Commission and other relevant departments or the stock exchange.
Except for the cumulative voting system to elect directors, each director candidate shall be submitted as a separate proposal.
Article 63 After the notice of the shareholders' meeting is issued, the shareholders' meeting shall not be postponed or canceled without justifiable reasons, and the proposals listed in the notice of the shareholders' meeting shall not be cancelled. In the event of postponement or cancellation, the convener shall make an announcement and explain the reasons at least 2 working days before the original date.
Section 6 Convening of Shareholders’ Meeting
Article 64 The company's board of directors and other conveners shall take necessary measures to ensure the normal order of the shareholders' meeting, and shall take measures to stop any behavior that interferes with the shareholders' meeting, provoke troubles and infringe upon the legitimate rights and interests of shareholders and promptly report to the relevant departments for investigation and punishment.
Article 65 All shareholders or their agents registered on the equity registration date have the right to attend the shareholders' meeting. and exercise voting rights in accordance with relevant laws, regulations and these Articles of Association.
Shareholders may attend the shareholders' meeting in person or entrust a proxy to attend and vote on their behalf.
Article 66 If an individual shareholder attends a meeting in person, he or she shall present his/her identity card or other valid certificate or certificate that can indicate his identity; if he or she attends the meeting on behalf of another person, he or she shall present his or her valid identity certificate or a shareholder's power of attorney.
Legal person shareholders shall be represented by their legal representative or an agent entrusted by the legal representative to attend the meeting. If the legal representative attends the meeting, he or she shall present his/her identity card and a valid certificate that proves his or her qualifications as the legal representative; if an agent attends the meeting, the agent shall present his/her identity card and a written power of attorney issued by the legal representative of the legal person shareholder unit in accordance with the law.
Article 67 The power of attorney issued by a shareholder to entrust others to attend the shareholders’ meeting shall specify the following contents:
(1) The name of the client, the type and number of company shares held;
(2) The name of the agent;
(3) Specific instructions from shareholders, including instructions to vote in favor, against or abstain from voting on each matter included in the agenda of the shareholders’ meeting;
(4) The date of issuance and validity period of the power of attorney;
(5) Signature or seal of the client. If the client is a legal person shareholder, the seal of the legal entity shall be affixed.
Article 68 If the power of attorney for proxy voting is signed by another person authorized by the principal, the power of attorney or other authorization documents authorizing the signing shall be notarized. The notarized power of attorney or other authorization document and the power of attorney for voting must be kept at the company's domicile or other place specified in the notice convening the meeting.
Article 69 The company is responsible for preparing a meeting register of attendees. The meeting register shall contain the names (or names of units) of the participants, ID numbers, the number of shares held or represented with voting rights, the names of the principals (or names of units) and other matters.
Article 70 The convener and the lawyer hired by the company will jointly verify the legality of shareholder qualifications based on the shareholder list provided by the securities registration and clearing agency, and register the names of shareholders and the number of shares with voting rights they hold. Registration for the meeting shall be terminated before the host of the meeting announces the number of shareholders and proxies present at the meeting and the total number of shares with voting rights held.
Article 71 If the shareholders' meeting requires directors and senior managers to attend the meeting, the directors and senior managers shall attend the meeting and accept inquiries from shareholders.
Article 72 The shareholders' meeting shall be chaired by the chairman of the board of directors. When 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 preside over the meeting.
The shareholders' meeting convened by the audit committee shall be presided over by the convener of the audit committee. When the convener of the Audit Committee is unable or fails to perform his duties, an Audit Committee member jointly elected by more than half of the Audit Committee members shall preside over the meeting.
A shareholders' meeting convened by shareholders themselves shall be presided over by the convener or his elected representative.
When convening a shareholders' meeting, if the presiding officer of the meeting violates the rules of procedure and makes it impossible to continue the shareholders' meeting, with the consent of more than half of the shareholders with voting rights present at the shareholders' meeting, the shareholders' meeting may elect one person to serve as the presiding officer of the meeting and continue the meeting.
Article 73 The company shall formulate rules of procedure for shareholders' meetings, specifying in detail the convening, convening and voting procedures of shareholders' meetings, including notification, registration, review of proposals, voting, counting of votes, announcement of voting results, formation of meeting resolutions, meeting minutes and their signing, announcements, etc., as well as the principles for authorization of the board of directors of shareholders' meetings, and the authorization content shall be clear and specific. The rules of procedure of the shareholders' meeting are attached to this Articles of Association and shall be drawn up by the board of directors and approved by the shareholders' meeting.
Article 74 At the annual shareholders' meeting, the board of directors shall make a report to the shareholders' meeting on its work over the past year. Each independent director should also make a performance report.
Article 75 When attending a shareholders' meeting, directors and senior managers shall provide explanations and explanations for shareholders' inquiries and suggestions.
Article 76 The host of the meeting shall announce the number of shareholders and agents attending the meeting on-site and the total number of shares with voting rights held before voting. The number of shareholders and agents attending the meeting on-site and the total number of shares with voting rights held shall be subject to the meeting registration.
Article 77 The shareholders' meeting shall have meeting minutes, which shall be held by the secretary of the board of directors. The minutes of the meeting record the following:
(1) Meeting time, location, agenda and name of the convener;
(2) The name of the meeting host or the directors, general manager and other senior managers attending the meeting;
(3) The number of shareholders and proxies attending the meeting, the total number of shares with voting rights held and their proportion to the total number of shares of the company;
(4) The deliberation process, key points and voting results of each proposal;
(5) Shareholders’ inquiries or suggestions and corresponding replies or explanations;
(6) Names of lawyers, counters, and scrutineers;
(7) Other contents that should be included in the meeting minutes as stipulated in this charter.
Article 78 The convener shall ensure that the contents of the meeting minutes are true, accurate and complete. Directors, board secretaries, conveners or their representatives, and meeting presiding officers who attend or attend the meeting shall sign on the meeting minutes. The minutes of the meeting shall be kept together with the signature books of the shareholders present on site, the power of attorney of the proxies, and the valid information on voting status via the Internet and other methods, and the retention period shall be no less than 10 years.
Article 79 The convener shall ensure that the shareholders’ meeting is held continuously until the final resolution is reached. If the shareholders' meeting is suspended or unable to make resolutions due to force majeure or other special reasons, necessary measures should be taken to resume the shareholders' meeting as soon as possible or directly terminate the shareholders' meeting, and make a timely announcement. At the same time, the convener should report to the local branch of the China Securities Regulatory Commission and the stock exchange where the company is located.
Section 7 Voting and Resolutions of Shareholders’ Meeting
Article 80 The resolutions of the shareholders' meeting are divided into ordinary resolutions and special resolutions.
Ordinary resolutions made by the shareholders' meeting shall be passed by more than half of the voting rights held by shareholders (including shareholders' proxies) present at the shareholders' meeting.
Special resolutions made by the shareholders' meeting shall be passed by more than 2/3 of the voting rights held by shareholders (including shareholders' proxies) present at the shareholders' meeting.
Article 81 The following matters shall be passed by ordinary resolutions at the shareholders’ meeting:
(1) Work report of the board of directors;
(2) The profit distribution plan and loss compensation plan drawn up by the board of directors;
(3) Appointment and removal of board members and their remuneration and payment methods;
(4) Other matters that should be passed by special resolutions except those stipulated by laws, administrative regulations or these Articles of Association.
Article 82 The following matters shall be passed by the shareholders' meeting through special resolutions:
(1) The company increases or decreases its registered capital;
(2) The division, spin-off, merger, dissolution and liquidation of the company;
(3) Modification of this Articles of Association;
(4) The company purchases or sells major assets within one year or the amount of guarantee exceeds 30% of the company’s latest audited total assets;
(5) Equity incentive plan;
(6) Other matters that are stipulated in laws, administrative regulations or these Articles of Association, and that are determined by the shareholders' meeting to have a significant impact on the company through ordinary resolutions and need to be passed through special resolutions.
Article 83 Shareholders (including shareholders’ agents) shall exercise their voting rights based on the number of voting shares they represent, and each share shall have one voting right.
The company's shares held by the company have no voting rights, and such shares are not included in the total number of voting shares held by shareholders present.
If a shareholder violates the provisions of paragraphs 1 and 2 of Article 63 of the Securities Law by purchasing shares of the company with voting rights, the shares exceeding the prescribed proportion shall not exercise voting rights within 36 months after the purchase, and shall not be included in the total number of shares with voting rights for shareholders present.
The company's board of directors, independent directors, shareholders holding more than 1% of voting shares, or investor protection institutions established in accordance with laws, administrative regulations or the provisions of the China Securities Regulatory Commission may publicly solicit shareholder voting rights. When soliciting shareholder voting rights, specific voting intentions and other information must be fully disclosed to the persons being solicited. It is prohibited to collect voting rights from shareholders through paid or disguised payment methods. Except for statutory conditions, a company may not impose minimum shareholding ratio restrictions on the solicitation of voting rights.
When the shareholders' meeting considers major matters affecting the interests of small and medium-sized investors, the votes of small and medium-sized investors shall be counted separately. The results of individual vote counting should be disclosed to the public in a timely manner.
Shareholders may openly solicit from other shareholders their legally enjoyed shareholder rights such as the right to convene shareholders' meetings, the right to propose proposals, the right to nominate, and the right to vote, but the solicitation may not be done in a paid or disguised form.
Article 84 Related transactions between the company and related parties with an amount of more than RMB 30 million and accounting for more than 5% of the absolute value of the company's latest audited net assets shall be submitted to the shareholders' meeting for review after being reviewed and approved by the company's board of directors. Such related transactions can only be implemented after being reviewed and approved by the company's shareholders' meeting, except for the company's donation of cash assets and provision of guarantees.
Article 85 When the shareholders' meeting considers related party transactions, related shareholders shall not participate in voting, and the number of shares with voting rights they represent shall not be counted in the total number of valid votes; the announcement of the resolution of the shareholders' meeting shall fully disclose the voting status of non-related shareholders.
When the shareholders' meeting considers related party transactions, the following shareholders shall abstain from voting:
(1) Counterparty;
(2) Having direct or indirect control over the counterparty;
(3) Directly or indirectly controlled by the counterparty;
(4) Directly or indirectly controlled by the same legal person or natural person as the counterparty;
(5) Working for the counterparty to the transaction, or for a legal entity that can directly or indirectly control the counterparty or a legal entity directly or indirectly controlled by the counterparty (applicable to shareholders who are natural persons);
(6) Close family members who are the counterparty to the transaction or its direct or indirect controller;
(7) Its voting rights are restricted or affected due to the existence of an unfulfilled equity transfer agreement or other agreement with the counterparty or its related parties;
(8) Legal persons or natural persons identified by the China Securities Regulatory Commission or the stock exchange that may cause the listed company to favor its interests.
When the shareholders' meeting considers relevant related-party transactions, related shareholders should take the initiative to declare the related relationship to the shareholders' meeting and abstain from voting, and they are not allowed to exercise voting rights on behalf of other shareholders. If a shareholder does not take the initiative to explain the related relationship and recuse himself, other shareholders may require him to explain the situation and recuse himself. The convener shall examine whether the shareholder is a related shareholder and whether the shareholder should recuse himself in accordance with relevant regulations.
Related shareholders who should be recused may participate in the discussion of related transactions involving themselves, and may provide explanations and explanations to the shareholders' meeting regarding the reasons for the related transactions, the basic conditions of the transactions, whether the transactions are fair and legal, and other matters.
If there are special circumstances where related shareholders cannot avoid the matter, the company, after obtaining the consent of the China Securities Regulatory Commission, may vote in accordance with normal procedures and provide detailed explanations in the resolution of the shareholders' meeting. After the shareholders' meeting, if other shareholders discover that a related shareholder participated in voting on related party transactions, or if a shareholder has objections to whether avoidance should be applied, they have the right to file a lawsuit with the People's Court regarding the relevant resolutions in accordance with the relevant provisions of these Articles of Association.
Article 86 The shareholders’ meeting shall review related party transactions in accordance with the following procedures:
(1) The board of directors or other convener shall make a judgment on whether the relevant matters to be submitted to the shareholders' meeting for consideration constitute a related transaction. When making the judgment, the number of shares held by shareholders shall be based on the amount in the shareholder list;
(2) If it is judged that the relevant matters to be submitted to the shareholders' meeting for consideration constitute a related transaction, the board of directors or other convener shall notify the related shareholders in writing and require them to reply whether to apply for exemption;
(3) The board of directors or other conveners should complete the above work before issuing the notice of the shareholders’ meeting, and explain the relevant results in the notice of the shareholders’ meeting;
(4) When the shareholders' meeting votes on related transactions, after deducting the number of voting shares represented by the related shareholders, the non-related shareholders attending the shareholders' meeting will vote in accordance with the relevant provisions of these Articles of Association.
Article 87 On the premise of ensuring that the shareholders' meeting is legal and effective, the company shall provide convenience for shareholders to participate in the shareholders' meeting through various methods and channels, including providing online voting platforms and other modern information technology means.
Article 88 Except when the company is in crisis or other special circumstances, the company may not enter into a contract with anyone other than directors, general managers and other senior managers to entrust the management of all or important business of the company to that person without the approval of a special resolution of the shareholders' meeting.
Article 89 The list of director candidates shall be submitted to the shareholders' meeting for voting in the form of a proposal.
Except for the cumulative voting system to elect directors, each director candidate shall be submitted as a separate proposal.
The nomination methods and procedures for directors are as follows:
(1) The board of directors and shareholders who individually or jointly hold more than 3% of the company's shares for more than 90 consecutive days have the right to propose nominations for non-independent director candidates to the board of directors. The board of directors will submit a proposal to the shareholders' meeting after soliciting the opinions of the nominees and reviewing their qualifications.
(2) The nomination methods and procedures for independent directors shall be implemented in accordance with the relevant provisions of laws, administrative regulations and departmental rules.
Article 90 When the shareholders' meeting votes on the election of directors, if two or more independent directors are elected in accordance with the provisions of the Articles of Association or the resolution of the shareholders' meeting, or if the proportion of shares owned by a single shareholder and its persons acting in concert exceeds 30%, a cumulative voting system shall be implemented. When the aforementioned requirements are not met, a cumulative voting system may also be adopted in accordance with the requirements of the Articles of Association or relevant regulations.
The cumulative voting system mentioned in the preceding paragraph means that when the shareholders' meeting elects directors, each share has the same voting rights as the number of directors to be elected, and the voting rights held by shareholders can be used collectively. The board of directors shall announce to shareholders the resume and basic information of candidate directors.
The specific operating procedures of the cumulative voting system are as follows:
(1) The company’s independent directors and non-independent directors should be elected and voted separately.
(2) When electing independent directors, the number of votes each shareholder is entitled to is equal to the number of shares he holds multiplied by the number of independent directors he is entitled to elect. This number of votes can only be cast for the company's independent director candidates, and the one with the most votes is elected.
(3) When electing non-independent directors, the number of votes each shareholder is entitled to is equal to the number of shares he holds multiplied by the number of non-independent directors he has the right to elect. This number of votes can only be cast on the non-independent director candidates of the company, and the one with the most votes is elected.
(4) When the number of candidates exceeds the number stipulated in these Articles of Association, the number of independent directors and non-independent directors selected by each shareholder's vote shall not exceed the number of independent directors and non-independent directors stipulated in these Articles of Association, and the total number of votes cast shall not exceed the number of votes that the shareholder is entitled to obtain, otherwise the vote will be invalid.
(5) The scrutineers and counters of the shareholders' meeting must carefully check the above situation to ensure the fairness and effectiveness of the cumulative voting.
Article 91 In addition to the cumulative voting system, the shareholders' meeting shall vote on all proposals item by item; if there are different proposals on the same matter, the shareholders' meeting shall vote in the order in which the proposals are submitted. Unless the shareholders' meeting is suspended or unable to make a resolution due to special reasons such as force majeure, the shareholders' meeting will not shelve proposals or refrain from voting.
Article 92 When the shareholders' meeting considers the proposal, the proposal shall not be modified. Otherwise, the relevant changes shall be regarded as a new proposal and shall not be voted on at the shareholders' meeting.
Article 93 The same voting right can only choose one of on-site, online or other voting methods. In the event of repeated voting for the same voting right, the result of the first vote shall prevail.
Article 94 The shareholders' meeting shall vote by registered vote.
Article 95 Before the shareholders' meeting votes on a proposal, two shareholder representatives shall be elected to participate in the counting and supervision of votes. If the matters under consideration are related to shareholders, relevant shareholders and agents are not allowed to participate in vote counting or voting supervision.
When a shareholders' meeting votes on a proposal, lawyers and shareholder representatives shall be jointly responsible for counting and supervising the votes, and the voting results shall be announced on the spot. The voting results of the resolution shall be recorded in the meeting minutes.
Shareholders of listed companies or their agents who vote online or by other means have the right to check their voting results through the corresponding voting system.
Article 96 The on-site shareholders' meeting shall not end earlier than the online or other means. The host of the meeting shall announce the voting status and results of each proposal, and declare whether the proposal is passed based on the voting results.
Before the voting results are officially announced, the listed companies, vote counters, scrutineers, shareholders, network service providers and other relevant parties involved in the on-site shareholders' meeting, online and other voting methods have the obligation to keep the voting information confidential.
Article 97 Shareholders attending the shareholders' meeting shall express one of the following opinions on the proposals submitted for voting: agree, oppose or abstain from voting. The securities registration and clearing institution, as the nominal holder of the stock connect mechanism between the mainland and Hong Kong stock markets, shall not declare in accordance with the actual holder's wishes.
Votes that are not filled in, filled in incorrectly, with illegible handwriting, or uncast votes will be deemed as the voter giving up the right to vote, and the voting result of the number of shares held shall be counted as "abstention".
Article 98 If the presiding officer of the meeting has any doubts about the result of the resolution submitted for voting, he may organize a count of the votes cast; if the presiding officer of the meeting does not conduct a count of votes, and the shareholders attending the meeting or their agents have objections to the results announced by the presiding officer of the meeting, they have the right to request a counting of votes immediately after the voting results are announced, and the presiding officer of the meeting shall organize a counting of votes immediately.
Article 99 Resolutions of the shareholders' meeting shall be announced in a timely manner. The announcement shall list the number of shareholders and agents present at the meeting, the total number of voting shares held and their proportion to the total number of voting shares of the company, the voting method, the voting results of each proposal and the details of each resolution passed.
Article 100 If a proposal is not passed, or if this shareholders' meeting changes the resolution of the previous shareholders' meeting, a special reminder should be made in the announcement of the resolution of the shareholders' meeting.
Article 101: If the shareholders' meeting passes the relevant director election proposal, the new director will take office on the date of approval by the shareholders' meeting.
Article 102. If the shareholders’ meeting passes a proposal on distributing cash, giving away shares, or transferring capital reserves to increase share capital, the company will implement the specific plan within 2 months after the conclusion of the shareholders’ meeting.
Chapter 5 Directors and Board of Directors
Section 1 Directors
Article 103 A director of a company is a natural person who shall not serve as a director of the company under any of the following circumstances:
(1) Having no capacity for civil conduct or having limited capacity for civil conduct;
(2) If a person is sentenced to a criminal penalty for corruption, bribery, misappropriation of property, misappropriation of property or undermining the order of the socialist market economy, or is deprived of political rights due to a crime, and the execution period has not expired for more than 5 years, and if he is sentenced to probation, the probation period has not expired for more than two years;
(3) Serving as a director or factory director or manager of a company or enterprise undergoing bankruptcy liquidation, and being personally responsible for the bankruptcy of the company or enterprise, less than 3 years have elapsed since the date of completion of the bankruptcy liquidation of the company or enterprise;
(4) Serving as the legal representative of a company or enterprise that has had its business license revoked or ordered to close due to violations of the law, and bearing personal responsibility, and it has not been more than 3 years since the date when the company or enterprise's business license was revoked;
(5) An individual is listed as a dishonest person subject to execution by the people's court because of a relatively large amount of debt that has not been paid off when due;
(6) The China Securities Regulatory Commission has taken measures to prohibit entry into the securities market and the time limit has not expired;
(7) Being publicly determined by the stock exchange to be unfit to serve as a director or senior manager of a listed company, etc., and the time limit has not expired;
(8) Being publicly condemned by the stock exchange within the past three years;
(9) 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;
(10) Other contents stipulated in laws, administrative regulations or departmental rules.
The above period shall be calculated from the end of the time when the shareholders' meeting or the board of directors and other institutions where the directors and senior managers are to be elected shall review the proposals for the appointment of directors and senior managers.
If a director is elected, appointed or appointed in violation of the provisions of this Article, the election, appointment or appointment shall be invalid. If any of the circumstances specified in this article occurs during the term of office of a director, the company shall remove him from office and stop him from performing his duties.
Article 104 Directors shall be elected or replaced by the shareholders' meeting and may be removed from their posts by the shareholders' meeting before the expiration of their term. The director's term is 3 years. Directors may be re-elected upon expiration of their term of office. Before a director's term of office expires, the shareholders' meeting may not remove him from office without reason unless the following circumstances occur:
(1) I submit my resignation;
(2) There are circumstances that prevent you from serving as a director as stipulated in national laws, regulations or these Articles of Association;
(3) Unable to perform duties;
(4) Being unable to perform the duties of a director due to serious illness.
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, until the re-elected director takes office, the original director shall still perform his duties as a director in accordance with the provisions of laws, administrative regulations, departmental rules and these Articles of Association.
Directors may concurrently serve as managers or other senior managers, but the total number of directors who concurrently serve as managers or other senior managers and directors who are employee representatives shall not exceed 1/2 of the total number of directors of the company.
If the number of employees of the company reaches more than 300, there should be an employee representative director among the members of the board of directors. The employee representatives on the board of directors are elected by the company's employees through the employee representative meeting and do not need to be submitted to the shareholders' meeting for review.
Article 105 Directors shall abide by laws, administrative regulations and these Articles of Association, shall take measures to avoid conflicts between their own interests and the interests of the company, shall not use their powers to seek improper benefits, and shall have the following loyalty obligations to the company:
(1) Not to misappropriate company 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) Not violate the provisions of these Articles of Association, without the consent of the shareholders' meeting or the board of directors, lend company funds to others or use company property to provide guarantee for others;
(5) 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 provisions of these Articles, no contract or transaction may be made directly or indirectly with the company;
(6) Without reporting to the board of directors or the shareholders' meeting and obtaining the approval of the shareholders' meeting, they shall not take advantage of their position to seek business opportunities belonging to the company for themselves or others, operate business similar to that of the company for themselves or for others, unless the company cannot take advantage of the business opportunities in accordance with laws, administrative regulations or the provisions of these articles of association;
(7) You shall not accept commissions from other people’s transactions with the company and keep them as your own;
(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 this 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 (5) of Paragraph 1 of this Article shall apply when close relatives of directors and senior managers, enterprises directly or indirectly controlled by directors, senior managers or their close relatives, and related persons who have other related relationships with directors and senior managers, enter into contracts or conduct transactions with the company.
Article 106 Directors shall abide by laws, administrative regulations and these Articles of Association, and have the following diligence obligations towards the company. When performing their duties, they shall exercise reasonable care normally due to managers for the best interests of 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 periodic reports. Ensure that the information disclosed by the company 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 this Articles of Association. Article 107 If a director fails to attend two consecutive board meetings in person or entrusts other directors to attend board meetings, he shall be deemed to be unable to perform his duties, and the board of directors shall recommend his removal to the shareholders' meeting.
Article 108 Directors may resign before the expiration of their term of office. Directors who resign shall submit a written resignation report to the company. The company will disclose the relevant situation within two trading days.
If the number of directors on the company's board of directors falls below the statutory minimum due to the resignation of a director, the original director shall still perform his duties as a director in accordance with laws, administrative regulations, departmental rules and these Articles of Association until the newly elected director takes office.
Except for the circumstances listed in the preceding paragraph, a director's resignation shall take effect from the date the company receives the resignation report.
Article 109 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 terminated after the end of his term, but will remain valid within the reasonable period stipulated in these Articles of Association. The responsibilities that a director shall bear due to the performance of his duties during his term of office shall not be relieved or terminated upon resignation. A director's duty of confidentiality with respect to the company's trade secrets shall remain in effect after the end of his or her term of office until such time as the trade secrets become public information. A director's other duties of loyalty to the company and shareholders shall remain in effect for a period of two years from the date of his resignation.
Article 110 The shareholders' meeting may resolve to dismiss a director, and the dismissal shall take effect on the date the resolution is made.
If a director is dismissed before the expiration of his term without justifiable reasons, the director may request the company to compensate him.
Article 111 No director may act on behalf of the company or the board of directors in his or her own name without the provisions of these Articles of Association or the legal authorization of the board of directors. 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 112 If a director causes damage to others when performing company duties, the company will be liable for compensation; if a director commits intentional or gross negligence, he shall also be liable for compensation.
If a director violates laws, administrative regulations, departmental rules or the provisions of these Articles of Association when performing his duties and causes losses to the company, he shall be liable for compensation.
Article 113 Independent directors shall comply with the relevant provisions of laws, administrative regulations and departmental rules. The company has established the "Independent Director Work System", which specifically stipulates the conditions for independent directors to serve, election and replacement procedures, powers and obligations, etc., and will take effect after approval by the shareholders' meeting.
For independent directors who do not have the qualifications or capabilities of independent directors, fail to independently perform their duties, or fail to safeguard the legitimate rights and interests of the company and small and medium-sized shareholders, shareholders individually or collectively holding more than 1% of the company's shares may challenge the independent directors or propose removal to the company's board of directors. The questioned independent director shall promptly explain the matter questioned and disclose it. The company's board of directors should promptly convene a special meeting to discuss the matter after receiving relevant questions or removal proposals, and disclose the results of the discussion.
Section 2 Board of Directors
Article 114 The company shall have a board of directors, which shall be responsible to the shareholders' meeting.
Article 115 The board of directors shall consist of six directors, including one chairman and one employee director.
Article 116 The board of directors shall exercise the following powers:
(1) Convene a shareholders’ meeting and report work to the shareholders’ meeting;
(2) Implement the resolutions of the shareholders’ meeting;
(3) Decide on 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 mergers, divisions, dissolutions, and changes to the company’s form;
(7) Decide on the establishment of the company’s internal management organization;
(8) Appoint or dismiss the general manager and secretary to the board of directors, appoint or dismiss senior management personnel such as deputy general managers and financial controllers based on the nomination of the general manager, and decide on their remuneration, rewards and punishments;
(9) Formulate the company’s basic management system;
(10) 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. within the scope authorized by the shareholders’ meeting;
(11) Formulate amendment plans to this 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 general manager’s work report and inspect the general manager’s work;
(15) Other powers granted by laws, administrative regulations, departmental rules, these Articles of Association or the shareholders' meeting.
The specific powers of the board of directors in items (1) to (9) mentioned above shall be exercised collectively by the board of directors and shall not be authorized to be exercised by others. If other powers and powers involve major businesses and matters, collective decision-making approval shall be implemented, and no single or several directors shall be authorized to make decisions alone.
The board of directors may authorize board members to exercise some powers other than those specified in the preceding two paragraphs during adjournments, but the content of the authorization shall be clear and specific, and the implementation of the authorized matters shall be continuously supervised. The company's articles of association should specify the scope, authority, procedures and responsibilities of authorization.
Matters beyond the scope of authorization of the shareholders' meeting shall be submitted to the shareholders' meeting for review by the board of directors.
Article 117 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 118 The company formulates rules of procedure for the board of directors to ensure that the board of directors implements the resolutions of the shareholders' meeting, improves work efficiency, and ensures scientific decision-making. The procedural rules of the board of directors are attached to these articles of association and shall be drawn up by the board of directors and approved by the shareholders' meeting.
Article 119 The board of directors shall determine the authority for external investment, acquisition and sale of assets, asset mortgages, external guarantees, entrusted financial management, related transactions, external donations, etc., and establish strict review and decision-making procedures; major investment projects shall organize relevant experts and professionals to conduct reviews and submit them to the shareholders' meeting for approval.
Without violating laws, regulations and other provisions of these Articles, the company's purchase or sale of assets, external investment (including entrusted financial management, entrusted loans, investment in subsidiaries, etc.), renting or leasing assets, and signing of management contracts (including entrusted operations, entrusted operations, etc.) The review and decision-making of transactions such as donations or donated assets (except donated cash assets), creditor's rights or debt restructuring, transfer or assignment of research and development projects, signing of license agreements, waiver of rights (including waiver of pre-emptive right, pre-emptive subscription of capital contribution rights, etc.) shall comply with the following provisions:
(1) Transaction matters that meet the following transaction standards shall be reviewed and approved by the board of directors:
- If the total assets involved in the transaction (if there is both book value and appraised value, whichever is higher) account for more than 10% of the company's latest audited total assets; if the total assets involved in the transaction (if there are both book value and appraised value, whichever is higher) account for more than 50% of the company's most recent audited total assets, it should also be submitted to the shareholders' meeting for review.
Among them, if the company purchases or sells major assets within one year or the amount of guarantee exceeds 30% of the company's latest audited total assets, the board of directors shall make a resolution and submit it to the shareholders' meeting for consideration and approval by a special resolution;
The net assets involved in the transaction target (such as equity) (if there are both book value and appraisal value, whichever is higher) account for more than 10% of the company's latest audited net assets, and the absolute amount exceeds 10 million yuan; the net assets involved in the transaction target (such as equity) (if there are both book value and appraisal value, whichever is higher) account for more than 50% of the company's latest audited net assets, and the absolute amount exceeds RMB 5,000 Ten thousand yuan, it should also be submitted to the shareholders' meeting for review;
If the operating income related to the transaction target (such as equity) in the most recent fiscal year accounts for more than 10% of the company's audited operating income in the most recent fiscal year, and the absolute amount exceeds 10 million yuan; if the operating income related to the transaction target (such as equity) in the most recent fiscal year accounts for more than 50% of the company's audited operating income in the most recent fiscal year, and the absolute amount exceeds 50 million yuan, it should also be submitted to the shareholders' meeting for review;
If the net profit related to the transaction object (such as equity) in the most recent fiscal year accounts for more than 10% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds 1 million yuan; if the net profit related to the transaction object (such as equity) in the most recent accounting year accounts for more than 50% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds 5 million yuan, it should also be submitted to the shareholders' meeting for review;
If the transaction amount (including liabilities and expenses) accounts for more than 10% of the company's latest audited net assets, and the absolute amount exceeds RMB 10 million; if the transaction amount (including liabilities and expenses) accounts for more than 50% of the company's latest audited net assets, and the absolute amount exceeds RMB 50 million, it should also be submitted to the shareholders' meeting for review;
If the profit generated by the transaction accounts for more than 10% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds RMB 1 million; if the profit generated from the transaction accounts for more than 50% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds RMB 5 million, it shall also be submitted to the shareholders' meeting for review;
If the data involved in the above indicators is negative, its absolute value is used for calculation.
If a company commits a transaction under any of the following circumstances, it may be exempted from submitting it to the shareholders' meeting for review in accordance with the provisions of this article, but it must still perform its information disclosure obligations:
The company receives cash assets as gifts, obtains debt relief and other transactions that do not involve payment of consideration or any obligations;
The transactions of the company only meet the net profit standard of this article, and the absolute value of the company’s earnings per share in the most recent fiscal year is less than RMB 0.05.
If the subject matter of the transaction is equity, and if the equity is purchased or sold, the relevant financial indicators shall be calculated based on the proportion of changes in the company's equity holdings in the target company. If the scope of the company's consolidated statements will be changed, the relevant financial indicators of the target company corresponding to the equity shall be used as the basis for calculation and the above provisions shall apply.
The above-mentioned transactions belong to the purchase and sale of assets, and do not include the purchase of raw materials, fuel and power, and the sale of products, commodities and other assets related to daily operations. However, the purchase and sale of such assets in asset replacement are still included.
If the above-mentioned transaction is a company's external investment to establish a limited liability company or a joint-stock company, and the full amount of capital contribution can be paid in installments in accordance with the provisions of the "Company Law", the provisions of this paragraph shall be applied based on the full amount of capital contribution stipulated in the agreement.
When the above-mentioned transactions are matters such as provision of financial assistance and entrusted financial management, the amount incurred shall be used as the calculation standard and shall be calculated cumulatively within twelve consecutive months according to the type of transaction. The provisions of this paragraph shall apply. If relevant obligations have been fulfilled in accordance with the provisions of this paragraph, they will no longer be included in the relevant cumulative calculation scope.
When the company provides guarantees and financial assistance, regardless of the amount, it must be submitted to the board of directors for review. In addition to being reviewed and approved by more than half of all directors, it must also be reviewed and approved by more than two-thirds of the directors attending the board meeting, and disclosed in a timely manner. When the company encounters the provision of guarantees stipulated in Article 46 of the Articles of Association and the provision of financial assistance stipulated in Article 47 of the Articles of Association, it shall also be submitted to the shareholders' meeting for review and approval after the board of directors has reviewed and approved it.
The provisions of this article shall apply to similar transactions related to the subject matter of transactions that occur within the company within 12 months on a cumulative basis. Those who have fulfilled relevant obligations in accordance with the provisions of this article will no longer be included in the relevant cumulative calculation scope.
(2) Related transactions that meet the following transaction standards shall be reviewed and approved by the board of directors:
Transactions between the company and related natural persons (including liabilities and expenses) exceeding RMB 300,000, and transactions between the company and related legal persons (or other organizations) involving debts and expenses exceeding RMB 3 million and accounting for more than 0.5% of the absolute value of the company's latest audited net assets; transactions between the company and related parties (including debts and expenses) exceeding RMB 3,000. Related transactions exceeding RMB 10,000 and accounting for more than 5% of the absolute value of the company's latest audited net assets should also be submitted to the shareholders' meeting for review.
If the company conducts the same related-party transaction in batches within twelve consecutive months, the cumulative number of transactions during this period will be calculated. The company's securities investment shall be submitted to the shareholders' meeting for review after being reviewed and approved by the board of directors, and must obtain the consent of more than two-thirds of all directors and more than two-thirds of independent directors.
Transactions such as external investment and asset disposal by a company's holding subsidiaries shall be carried out in accordance with the provisions of its articles of association. However, the decision-making authority granted to the company's board of directors or executive directors by the articles of association of the holding subsidiary shall not exceed the authority of the company's board of directors. The company's voting intention at the subsidiary's shareholders' meeting must be directed by the company's board of directors or shareholders' meeting in accordance with its authority.
If the above matters involve other laws, administrative regulations, departmental rules, normative documents, company articles of association or other provisions of the exchange, such provisions shall prevail.
Article 120 The chairman of the board of directors shall be elected by more than half of all directors.
Article 121 The chairman of the board shall exercise the following powers:
(1) Preside over shareholders’ meetings, convene and preside over board meetings;
(2) Supervise and inspect the implementation of board resolutions;
(3) The right to make adjustments within 5% of the amount involved in the business plan and investment plan decided by the company’s board of directors;
(4) The amount involved in the purchase, sale, disposal, leasing, leasing and other matters of assets other than the business plan and investment plan decided by the company's board of directors (excluding external investment) does not reach the decision-making power of the board of directors for review and approval;
(5) Sign stocks, bonds and other securities issued by the company;
(6) Sign board of directors documents and other documents that should be signed by the company’s legal representative;
(7) In the event of force majeure emergencies such as severe natural disasters, exercise special power to handle company affairs in compliance with legal provisions and the company's interests, and report to the company's board of directors and shareholders' meeting afterwards;
(8) Other powers granted by the board of directors.
Article 122 If the chairman of the board of directors is unable or fails to perform his duties, more than half of the directors shall jointly elect a director to perform his duties.
The board of directors may authorize the chairman to exercise other powers of the board of directors when the board of directors is not in session. Such authorization must be approved by more than half of all directors and must be made in the form of a resolution of the board of directors. The board of directors' authorization to the chairman should be clear and specific.
Unless the board of directors authorizes the chairman of the board for a specific period or the board of directors authorizes it again, the authorization shall automatically terminate when the term of the board of directors expires or the chairman of the board is unable to perform his duties. The chairman of the board of directors should promptly report to the board of directors on the implementation of the authorization.
Article 123 The board of directors shall hold at least two meetings every year, convened by the chairman of the board of directors, and all directors shall be notified in writing 10 days before the meeting. Notifications may be sent in person, by fax, by mail or by email.
Article 124 Shareholders representing more than 1/10 of the voting rights, more than 1/3 of the directors, more than 1/2 of the independent directors or the audit committee may propose to convene an extraordinary meeting of the board of directors. The chairman of the board of directors shall convene and preside over a board meeting within 10 days after receiving the proposal.
Article 125 The notice of the extraordinary board meeting of the board of directors shall be sent in person, by fax, by mail or by e-mail, and the notification time limit shall be at least 1 day before the meeting.
If the situation is urgent and it is necessary to convene an extraordinary meeting of the board of directors as soon as possible, the meeting notice may be issued at any time by telephone or other oral means, but the convener shall make an explanation at the meeting.
Article 126 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.
Article 127 A board meeting can only be held if more than half of the directors are present. 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.
When the board of directors considers guarantee matters and financial assistance matters, it must be approved by more than 2/3 of the directors present.
Article 128 If a director has a relationship with an enterprise or individual involved in matters resolved at a board meeting, the director shall report to the board of directors in writing in a timely manner. Directors with related relationships may not exercise voting rights on this resolution, nor may they exercise voting rights on behalf of other directors. The board meeting can be held if more than half of the unrelated directors are present, and resolutions made at the board meeting must be passed by more than half of the unrelated directors. If the number of unrelated directors attending the board meeting is less than 3, the matter shall be submitted to the shareholders' meeting for review.
Article 129 The voting method for resolutions of the board of directors shall be a show of hands or a written vote.
On the premise of ensuring that directors can fully express their opinions, extraordinary meetings of the board of directors may vote and make resolutions by fax, electronic communication or other communication methods, and the resolutions shall be signed by the participating directors.
Article 130 Board meetings shall be attended by the director in person. If a director is unable to attend for any reason, he may authorize another director in writing to attend on his behalf. The letter of authorization shall state the name of the agent, matters of agency, scope of authorization and validity period, and shall be signed or sealed by the principal. 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.
If a director is unable to attend the board of directors in person for any reason, he shall carefully choose and entrust another director in writing to attend the meeting on his behalf. Independent directors shall not entrust a non-independent director to attend the meeting on his behalf. When voting matters are involved, the principal shall express his/her consent, objection or abstention for each matter 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' responsibilities for voting matters will not be relieved by entrusting other directors to attend.
A director may not accept the entrustment of more than two directors to attend the meeting on his or her behalf at one board meeting. When reviewing related party transactions, non-related directors shall not entrust related directors to attend the meeting on their behalf.
Article 131 The board of directors shall make minutes of its decisions on matters discussed at the meeting, and the directors attending the meeting shall sign on the minutes. Directors present at the meeting have the right to request an explanatory record of their remarks in the minutes of the meeting.
The minutes of board of directors meetings shall be kept as company files and shall be kept for no less than ten years.
Article 132 The minutes of board meetings shall include the following contents:
(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.
Section 3 Independent Directors
Article 133 Independent directors shall conscientiously perform their duties in accordance with laws, administrative regulations, the provisions of the China Securities Regulatory Commission, stock exchanges and these Articles of Association, play a role in decision-making, supervision and balance, and professional consultation in the board of directors, safeguard the overall interests of the company, and protect the legitimate rights and interests of small and medium-sized shareholders.
Article 134 Independent directors must maintain independence. The following persons are not allowed to serve as independent directors:
(1) Personnel working in the company or its affiliated enterprises and their spouses, parents, children, and major social relations;
(2) Directly or indirectly hold more than 1% of the company’s issued shares or are natural person shareholders and their spouses, parents, and children among the top ten shareholders of the company;
(3) Shareholders who directly or indirectly hold more than 5% of the company’s issued shares or persons who hold positions among the top five shareholders of the company and their spouses, parents, and children;
(4) Personnel working in affiliated enterprises of the company’s controlling shareholder or actual controller and their spouses, parents, and children;
(5) Persons who have significant business dealings with the company, its controlling shareholders, actual controllers, or their respective subsidiaries, or persons who hold positions in units with significant business dealings, their controlling shareholders, or actual controllers;
(6) Personnel who provide financial, legal, consulting, sponsorship and other services to the company and its controlling shareholders, actual controllers or their respective affiliated enterprises, including but not limited to all members of the project team of the intermediary agency providing services, reviewers at all levels, persons who signed the report, partners, directors, senior managers and principal persons in charge;
(7) Persons who have had the circumstances listed in items 1 to 6 in the past twelve months;
(8) Other personnel who are not independent as stipulated in laws, administrative regulations, regulations of the China Securities Regulatory Commission, business rules of stock exchanges and these Articles of Association.
Independent directors should conduct self-examinations on their independence every year and submit the self-examination results to the board of directors. The board of directors should evaluate the independence of serving independent directors every year and issue special opinions, which should be disclosed at the same time as the annual report.
Article 135 To serve as an independent director of a company, one must meet the following conditions:
(1) Qualified to serve as a director of a listed company in accordance with laws, administrative regulations and other relevant provisions;
(2) Meet the independence requirements stipulated in this Articles of Association;
(3) Have basic knowledge of the operation of listed companies and be familiar with relevant laws, regulations and rules;
(4) Have more than five years of legal, accounting or economic work experience necessary to perform the duties of an independent director;
(5) Have good personal moral character and have no bad records such as major breach of trust;
(6) Other conditions stipulated in laws, administrative regulations, regulations of the China Securities Regulatory Commission, business rules of stock exchanges and these Articles of Association.
Article 136 As a member of the board of directors, independent directors have a duty of loyalty and diligence to the company and all shareholders, and prudently perform the following duties:
(1) Participate in the decision-making of the board of directors and express clear opinions on the matters discussed;
(2) Supervise potential major conflicts of interest between the company and its controlling shareholders, actual controllers, directors, and senior managers, and protect the legitimate rights and interests of small and medium-sized shareholders;
(3) Provide professional and objective suggestions on the company’s business development and promote the improvement of the board’s decision-making level;
(4) Other duties stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and these Articles of Association.
Article 137 Independent directors shall exercise the following special powers:
(1) Independently hire intermediaries to audit, consult or verify specific matters of the company;
(2) Propose to the board of directors to convene an extraordinary shareholders’ meeting;
(3) Proposing to convene a board meeting;
(4) Publicly solicit shareholder rights from shareholders in accordance with the law;
(5) Express independent opinions on matters that may damage the rights and interests of the company or small and medium-sized shareholders;
(6) Other powers stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and these Articles of Association.
The exercise of the powers listed in items 1 to 3 of the preceding paragraph by independent directors shall be subject to the consent of more than half of all independent directors.
If an independent director exercises the powers listed in paragraph 1, the company will promptly disclose it. If the above powers cannot be exercised normally, the company will disclose the specific circumstances and reasons.
Article 138 The following matters shall be submitted to the board of directors for review after being approved by more than half of all independent directors of the company:
(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;
(4) Other matters stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and these Articles of Association.
Article 139 The company shall establish a special meeting mechanism attended by all independent directors. The board of directors' review of related transactions and other matters shall be approved in advance by a special meeting of independent directors. The company holds special meetings of independent directors regularly or irregularly. Matters listed in items (1) to (3) of paragraph 1 of Article 137 of this Article and Article 138 shall be reviewed by special meetings of independent directors.
Special meetings of independent directors can study and discuss other matters of the company as needed.
Special meetings of independent directors shall be convened and chaired by an independent director jointly elected by more than half of the independent directors; if the convener fails or is unable to perform his duties, two or more independent directors may convene and elect a representative to preside.
Minutes of special meetings of independent directors shall be made in accordance with regulations, and the opinions of independent directors shall be stated in the minutes. Independent directors should sign and confirm the meeting minutes.
The company provides convenience and support for the convening of special meetings of independent directors.
Section 4 Special Committees of the Board of Directors
Article 140 The company's board of directors shall set up an audit committee to exercise the powers of the board of supervisors as stipulated in the Company Law.
Article 141 The Audit Committee shall consist of three members who are directors who do not hold senior management positions in the company, including two independent directors, and the accounting professionals among the independent directors shall serve as the convener.
Article 142 The Audit Committee is responsible for reviewing the company's financial information and its disclosure, supervising and evaluating internal and external audit work and internal control. The following matters shall be submitted to the Board of Directors for review after being approved by more than half of all members of the Audit Committee:
(1) Disclose financial information and internal control evaluation reports in financial accounting reports and periodic reports;
(2) Appoint or dismiss the accounting firm that handles the company’s audit business;
(3) Appoint or dismiss the company’s financial director;
(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 these Articles of Association.
Article 143 The main responsibilities of the audit committee are:
(1) Supervise and evaluate external audit work, and propose to hire or replace external audit institutions;
(2) Guide and supervise the establishment and implementation of the company’s internal audit system;
(3) Supervise and evaluate internal audit work, and be responsible for coordination between internal audit and external audit;
(4) Review the company’s financial information and its disclosure;
(5) Supervise and evaluate the company’s internal controls;
(6) Review the company’s annual internal audit work plan and supervise the implementation of the company’s internal audit plan;
(7) Review the company’s financial reports and express opinions on them;
(8) Guide the effective operation of the internal audit department, and report to the board of directors the progress, quality and major problems found in the internal audit work. The company's internal audit department shall report its work to the audit committee. Various audit reports submitted by the internal audit department to the management, rectification plans for audit issues, and rectification status shall be submitted to the audit committee at the same time;
(9) Other authorities granted by the company’s board of directors;
(10) Other matters involved in laws and regulations, relevant provisions of the Shanghai Stock Exchange, the company's articles of association, and other company systems.
Article 144 The Audit Committee shall hold at least one meeting every quarter. Extraordinary meetings may be convened upon the proposal of 2 or more members, or when the convener deems it necessary. Meetings of the Audit Committee must be attended by more than 2/3 of the members.
Resolutions made by the Audit Committee must be approved by more than half of the members of the Audit Committee. The voting on resolutions of the Audit Committee shall be one person, one vote.
The audit committee shall produce meeting minutes in accordance with regulations when making resolutions, and the members of the audit committee who attended the meeting shall sign on the meeting minutes.
The working procedures of the Audit Committee are formulated by the Board of Directors.
Article 145 The company's board of directors shall establish other special committees such as strategy and investment, nomination, remuneration and assessment, etc., to perform their duties in accordance with the Articles of Association and the authorization of the board of directors. The proposals of the special committees shall be submitted to the board of directors for review and decision. The working procedures of special committees are formulated by the board of directors.
The members of the special committees shall all be composed of directors. Among them, independent directors shall constitute the majority of the Audit Committee, Nomination Committee, and Remuneration and Appraisal Committee and shall serve as the convener.
Article 146 The main responsibilities of the Strategy and Investment Committee:
(1) Conduct research and make suggestions on the company’s long-term development strategic plan;
(2) Conduct research and make recommendations on major investment and financing plans that are required by the Articles of Association or authorized by the shareholders’ meeting and must be approved by the board of directors;
(3) Conduct research and make recommendations on major capital operations and asset management projects that are required by the Articles of Association or authorized by the shareholders’ meeting and must be approved by the board of directors;
(4) Conduct research and make suggestions on other major matters affecting the company’s development;
(5) Inspect the implementation of the above matters;
(6) Other matters authorized by the board of directors.
Article 147 The main responsibilities of the Nomination Committee:
(1) Make recommendations to the board of directors on the size and composition of the board of directors based on the company’s operating activities, asset size and equity structure;
(2) Research and formulate selection criteria and procedures for directors and senior managers, and make recommendations to the board of directors;
(3) Extensively search for qualified directors and senior management candidates;
(4) Select and review director candidates and senior management candidates, and make recommendations;
(5) Review and make recommendations on other senior managers who must be submitted to the board of directors for appointment;
(6) Other matters authorized by the board of directors.
If the board of directors fails to adopt the recommendations of the nomination committee or does not fully adopt them, it shall record the opinions of the nomination committee and the specific reasons for failure to adopt them in the board resolution and disclose them.
Article 148 The main responsibilities of the Remuneration and Appraisal Committee:
(1) Formulate remuneration plans or plans based on the main scope, responsibilities, importance of management positions of directors and senior managers, as well as the remuneration levels of other relevant positions in relevant enterprises. The remuneration plans or plans mainly include but are not limited to remuneration decision mechanisms, performance evaluation standards, decision-making processes, payment and stop-payment recourse arrangements, main evaluation systems, rewards and punishments and other remuneration policies, main plans and systems, etc.;
(2) Study the assessment standards for directors and senior managers, conduct assessments and make suggestions;
(3) Review the performance of duties by the company’s directors (non-independent directors) and senior managers and conduct annual performance appraisals on them;
(4) Make suggestions for formulating or changing equity incentive plans and employee stock ownership plans, and determine the conditions for granting rights and exercising rights to incentive targets;
(5) Make recommendations to directors and senior managers on how to arrange shareholding plans in subsidiaries to be spun off;
(6) Responsible for supervising the implementation of the company’s compensation system;
(7) Other matters authorized by the board of directors.
If the board of directors fails to adopt or fully adopts the recommendations of the Remuneration and Appraisal Committee, it shall record the opinions of the Remuneration and Appraisal Committee and the specific reasons for failure to adopt them in the resolution of the board of directors and disclose them.
Article 149 Each special committee may hire an intermediary agency to provide professional advice, and the relevant expenses shall be borne by the company.
Chapter 6 General Manager and Other Senior Management Personnel
Article 150 The company shall have a general manager, who shall be appointed or dismissed by the board of directors. The company has a deputy general manager, who is nominated by the general manager and appointed or dismissed by the board of directors. The deputy general manager is directly responsible to the general manager, reports to him, and performs relevant duties according to the establishment of the company's internal management organization.
The general manager, deputy general managers, financial controller and secretary of the board of directors are the senior management personnel of the company.
Article 151 The provisions of this Articles of Association regarding the circumstances in which directors are prohibited from serving as directors and the resignation management system shall also apply to senior managers.
The provisions of this Articles of Association regarding directors' duties of loyalty and diligence also apply to senior managers.
Article 152 Persons who hold other positions other than directors in the company's controlling shareholder unit shall not serve as senior managers of the company.
Article 153 The term of office of the general manager is three years and may be re-appointed.
Article 154 The general manager shall be responsible to the board of directors and shall exercise the following powers:
(1) Preside over the company’s operation and management, organize the implementation of board resolutions, and report work to the board of directors;
(2) Organize and implement the company’s annual business plan and investment plan;
(3) Formulate a plan for the establishment of the company’s internal management organization;
(4) Formulate the company’s basic management system;
(5) Formulate specific regulations of the company;
(6) Request the board of directors to appoint or dismiss the company’s deputy general manager and financial director;
(7) Decide to appoint or dismiss responsible management personnel other than those who shall be appointed or dismissed by the board of directors;
(8) Other powers granted by this Articles of Association or the Board of Directors.
The general manager attends board meetings.
Article 155 The company shall formulate work rules for the general manager and submit them to the board of directors for approval before implementation.
Article 156 The general manager’s working rules include the following contents:
(1) The conditions, procedures and participants for the general manager meeting;
(2) The specific responsibilities and division of labor of the general manager and other senior managers;
(3) The use of company funds and assets, the authority to sign major contracts, and the reporting system to the board of directors;
(4) Other matters deemed necessary by the board of directors.
Article 157 The general manager and deputy general manager may resign before the expiration of their term of office. The specific procedures and methods for resignation shall be stipulated in the labor contract between the general manager, deputy general manager and the company.
Article 158 Based on its own circumstances, the company shall stipulate in its articles of association the procedures for the appointment and removal of deputy general managers, the relationship between the deputy general managers and the general manager, and may stipulate the duties and powers of the deputy general managers.
Article 159 The company shall have a secretary to the board of directors, who shall be responsible for the preparation of the company’s shareholders’ meetings and board of directors meetings, the storage of documents, the management of the company’s shareholder information, and the handling of information disclosure matters.
The secretary of the board of directors shall abide by the relevant provisions of laws, administrative regulations, department rules and these articles of association.
Article 160 If a senior manager performs his duties and causes damage to others, the company will be liable for compensation; if a senior manager commits intentional or gross negligence, he shall also be liable for compensation.
Senior managers who violate laws, administrative regulations, departmental rules or the provisions of these Articles of Association when performing their duties and cause losses to the company shall bear liability for compensation.
Article 161 The senior managers of the company shall faithfully perform their duties and safeguard the best interests of the company and all shareholders.
If a company's senior managers fail to faithfully perform their duties or violate their fiduciary obligations, thereby causing damage to the interests of the company and public shareholders, they shall bear liability for compensation in accordance with the law.
Chapter 7 Financial Accounting System, Profit Distribution and Auditing
Section 1 Financial Accounting System
Article 162 The company shall formulate its financial accounting system in accordance with laws, administrative regulations and the provisions of relevant state departments.
Article 163 The company shall submit and disclose an annual report to the CSRC offices and stock exchanges within 4 months from the end of each fiscal year, and submit and disclose an interim report to the CSRC offices and stock exchanges within 2 months from the end of the first half of each fiscal year.
The above-mentioned annual reports and interim reports are prepared in accordance with relevant laws, administrative regulations, China Securities Regulatory Commission and stock exchange regulations.
Article 164 In addition to the statutory accounting books, the company shall not establish any other accounting books. The company's funds may not be opened in an account in the name of any individual.
Article 165 When a company distributes its after-tax profits for the year, it shall withdraw 10% of the profits into the company's statutory public reserve fund. If the cumulative amount of the company's statutory reserve fund is more than 50% of the company's registered capital, no further withdrawals can be made.
If the company's statutory reserve fund is insufficient to make up for losses in previous years, it shall first use the current year's profits to make up for the losses before withdrawing the statutory reserve fund in accordance with the provisions of the preceding paragraph.
After the company withdraws the statutory public reserve fund from the after-tax profits, it can also withdraw the discretionary public reserve fund from the after-tax profits upon resolution of the shareholders' meeting.
The remaining after-tax profits after the company has made up for its losses and withdrawn the reserve fund shall be distributed according to the proportion of shares held by shareholders, except where the Articles of Association stipulate that distribution is not based on the proportion of shareholdings.
If the shareholders' meeting violates the provisions of the preceding paragraph and distributes profits to shareholders before the company makes up for losses and withdraws statutory reserve funds, the shareholders must return the profits distributed in violation of the regulations to the company; if losses are caused to the company, the shareholders and the responsible directors and senior managers shall bear liability for compensation.
The company's shares held by the company will not participate in the distribution of profits.
Article 166 The company's public reserve shall be used to make up for the company's losses, expand the company's production and operations, or be used to increase the company's capital.
To make up for the company's losses from the public reserve fund, the discretionary public reserve fund and statutory public reserve fund shall be used first; if it still cannot be made up, the capital public reserve fund may be used in accordance with regulations.
When the statutory reserve fund is converted to increase the registered capital, the remaining reserve fund will not be less than 25% of the company's registered capital before the increase.
Article 167 After the company's shareholders make a resolution on the profit distribution plan, or after the company's board of directors formulates a specific plan based on the conditions and upper limits for interim dividends for the next year reviewed and approved by the annual shareholders' meeting, the company's board of directors shall complete the distribution of dividends (or shares) within 2 months after the shareholders' meeting or board of directors convenes.
Article 168 The company’s profit distribution policy is:
(1) Basic principles
The company implements an active, continuous and stable dividend distribution policy. The company's profit distribution attaches great importance to investors' reasonable investment returns and the company's sustainable development. The company, while complying with relevant laws, regulations and the company's articles of association, takes into account the company's long-term interests, the overall interests of all shareholders and the company's sustainable development. When choosing a profit distribution method, the company gives priority to cash dividends over stock dividends and other distribution methods. If the conditions for cash dividends are met, cash dividends will be used for profit distribution.
(2) Differentiated cash dividend policy
The company's board of directors comprehensively considers factors such as the characteristics of the industry, development stage, own business model, profitability level, and whether there are major capital expenditure arrangements, and distinguishes the following situations. And in accordance with the procedures stipulated in the company's articles of association, a differentiated cash dividend policy is proposed:
If the company is in a mature stage of development and has no major capital expenditure arrangements, when distributing profits, the proportion of cash dividends in this profit distribution should be at least 80%;
If the company is in a mature stage of development and has major capital expenditure arrangements, when distributing profits, the proportion of cash dividends in this profit distribution should be at least 40%;
If the company is in the growth stage and has major capital expenditure arrangements, when distributing profits, the proportion of cash dividends in this profit distribution should be at least 20%;
If the company's development stage is difficult to distinguish but has major capital expenditure arrangements, the proportion of cash dividends in this distribution shall not be less than 20%.
(3) Form of profit distribution
The company's profit distribution can take the form of cash, stocks, a combination of cash and stocks, or other methods permitted by laws and regulations. If conditions permit, the company may make mid-term profit distributions.
The company expresses the ratio of dividend distribution and capitalization per 10 shares, and the base number of capital is based on the actual capital before the implementation of the plan.
(4) Specific conditions, proportions and intervals for the company’s cash dividends
- Conditions for implementing cash distribution
The distributable profit realized by the company in the year or half-year is positive, that is, the after-tax profit remaining after the company makes up for losses and withdraws the provident fund is positive, and the company implements cash distribution.
- Interval between profit distribution periods
As long as the profit distribution conditions are met, in principle, the company will distribute profits once a year, mainly cash dividends, but the company can make mid-term cash dividends based on the company's profitability and capital needs.
- Minimum amount or proportion of cash dividends
If the company meets the conditions for cash dividend distribution, the company shall distribute dividends in cash, and the profits distributed in cash shall not be less than 20% of the distributable profits realized in the year; the company may distribute stock dividends while implementing the above cash dividend distribution.
(5) Specific conditions for the company to issue stock dividends
When the company is in good operating conditions and the board of directors believes that the company's stock price does not match the company's share capital and that issuing stock dividends is conducive to the overall interests of all shareholders of the company, the company can distribute profits by issuing stock dividends provided that the above conditions for cash dividends are met. The specific dividend ratio will be reviewed and approved by the company's board of directors and submitted to the shareholders' meeting for review and decision.
(6) Decision-making procedures and mechanisms for the company’s profit distribution plan
- The company's annual profit distribution plan is proposed and formulated by the board of directors based on the provisions of the company's articles of association, profitability, capital supply and demand. When the board of directors reviews the specific cash dividend plan, it should carefully study and demonstrate the timing, conditions and minimum ratio of the company's cash dividend distribution, the conditions for adjustment, and the decision-making process requirements. The independent directors should review the profit distribution plan and issue independent and clear opinions. After the board of directors approves it, it will be submitted to the shareholders' meeting for review.
Independent directors can solicit opinions from minority shareholders, propose dividend proposals, and submit them directly to the board of directors for review.
When the shareholders' meeting reviews the specific cash dividend plan, they should proactively communicate with shareholders, especially small and medium-sized shareholders, through multiple channels, including but not limited to telephone, fax and email communication or inviting small and medium-sized shareholders to attend meetings, fully listen to the opinions and demands of small and medium-sized shareholders, and respond to issues of concern to small and medium-sized shareholders in a timely manner.
If the company does not meet the conditions for cash distribution, or the company meets the conditions for cash dividends but does not propose a cash profit distribution plan, or the ratio of the total cash dividends to be distributed in the most recent year to the net profit attributable to the company's shareholders that year is less than 30%, the company should disclose in the board of directors' resolution announcement and the full text of the annual report the reasons for not making cash dividends or the low proportion of cash distribution, as well as the exact use of the company's retained earnings and expected investment returns.
When the board of directors deliberates, formulates or modifies policies related to profit distribution, it must be approved by a majority vote of all directors before it can be submitted to the shareholders' meeting for consideration; when the shareholders' meeting formulates or modifies policies related to profit distribution, it must be approved by more than two-thirds of the voting rights held by shareholders (including shareholders' agents) present at the shareholders' meeting.
(7) Changes in the company’s profit distribution policy
In the event of force majeure such as war or natural disasters, which has a significant impact on the company's production and operations, or when the company's own operating conditions undergo major changes, the company may adjust its profit distribution policy. When a company adjusts its profit distribution plan, the board of directors must hold a special discussion, explain the reasons in detail, and submit a written argumentation report to the shareholders' meeting for approval by a special resolution after being approved by the independent directors.
(8) Disclosure of profit distribution policy
The company discloses in detail the formulation and implementation of the profit distribution policy in its regular reports, explaining whether it complies with the provisions of the company's articles of association or the requirements of shareholders' meeting resolutions, whether the standards and proportions of cash dividends are clear and clear, whether the relevant decision-making procedures and mechanisms are complete, whether the independent directors perform their duties and play their due role, whether small and medium-sized shareholders have the opportunity to fully express their opinions and demands, whether the legitimate rights and interests of small and medium-sized shareholders are fully protected, etc. If it involves adjustments or changes to the profit distribution policy, it must also explain in detail whether the conditions and procedures for adjustment or changes are compliant and transparent.
(9) Other matters
If a shareholder illegally occupies the company's funds, the company will deduct the cash dividends distributed by the shareholder to repay the funds occupied. The company pays cash dividends and other payments to domestic shareholders, which are denominated, announced and paid in RMB.
Section 2 Internal Audit
Article 169 The company shall implement an internal audit system and clarify the leadership structure, responsibilities and authorities, staffing, funding guarantee, application of audit results and accountability for internal audit work.
The company's internal audit system is implemented after approval by the board of directors and disclosed to the outside world.
Article 170 The company's internal audit institution shall supervise and inspect the company's business activities, risk management, internal control, financial information and other matters.
The internal audit institution shall maintain independence and be equipped with full-time auditors. It shall not be placed under the leadership of the financial department, or work together with the financial department.
Article 171 The internal audit institution shall be responsible to the board of directors.
The internal audit institution shall accept the supervision and guidance of the audit committee during the supervision and inspection of the company's business activities, risk management, internal control, and financial information. If the internal audit institution discovers relevant major issues or clues, it shall immediately report directly to the audit committee.
Article 172 The internal audit institution is responsible for the specific organization and implementation of the company's internal control evaluation. The company issues an annual internal control evaluation report based on the evaluation report and relevant information issued by the internal audit institution and reviewed by the audit committee.
Article 173 When the audit committee communicates with external audit units such as accounting firms and national audit institutions, the internal audit institutions shall actively cooperate and provide necessary support and collaboration.
Article 174 The Audit Committee shall participate in the assessment of the person in charge of internal audit.
Section 3 Appointment of Accounting Firm
Article 175 The company shall employ an accounting firm that complies with the provisions of the Securities Law to provide auditing of accounting statements, verification of net assets and other related consulting services. The appointment shall be for one year and may be renewed.
Article 176 The company's appointment and dismissal of an accounting firm shall be decided by the shareholders' meeting. The board of directors shall not appoint an accounting firm before the shareholders' meeting makes a decision.
Article 177 The company guarantees to provide true and complete accounting vouchers, accounting books, financial accounting reports and other accounting information to the accounting firm hired, and shall not refuse, conceal or make false statements.
Article 178 The audit fees of an accounting firm shall be determined by the shareholders' meeting.
Article 179 When the company dismisses or no longer re-appoints the accounting firm, it shall notify the accounting firm fifteen days in advance. When the company's shareholders meeting votes on the dismissal of the accounting firm, the accounting firm shall be allowed to state its opinions.
If an accounting firm proposes to resign, it shall explain to the shareholders' meeting whether there are any improper circumstances in the company.
Chapter 8 Notices and Announcements
Section 1 Notice
Article 180 The company’s notice shall be issued in the following forms:
(1) Delivered by a dedicated person;
(2) Sent by mail;
(3) By way of announcement;
(4) Send by email;
(5) Send by fax;
(6) Other forms stipulated in this charter.
Article 181 If the notice issued by the company is made in the form of announcement, all relevant personnel shall be deemed to have received the notice once the announcement is made.
Article 182 The company shall notify the shareholders of the meeting by public announcement.
Article 183 The notice of the company's board of directors meeting shall be sent in person, by fax, by mail or by e-mail.
Article 184 If a company notice is sent by person, the recipient shall sign or stamp the delivery receipt, and the date of receipt by the recipient shall be the date of delivery; if the company notice is sent by mail, the delivery date shall be the fifth working day from the date of delivery to the post office or the date of receipt by the recipient; if the company notice is sent by announcement, the date of the first announcement shall be the date of delivery; if the company notice is sent by email, the date of delivery shall be the 2nd day from the date of sending the email. working days shall be the date of delivery; if the company's notice is sent by fax, the date of delivery shall be the second working day from the date of sending the fax.
Article 185 If the meeting notice is not sent to a person who has the right to receive the notice due to accidental omission or such person fails to receive the meeting notice, the meeting and the resolutions passed at the meeting will not be invalid.
Section 2 Announcement
Article 186 The company shall designate "Shanghai Securities News" or "China Securities News" and the website of the Shanghai Stock Exchange as the media for publishing company announcements and other information that needs to be disclosed.
Chapter 9 Merger, spin-off, capital increase, capital reduction, dissolution and liquidation
Section 1 Merger, spin-off, capital increase and capital reduction
Article 187 A company may be merged by absorption or by new establishment. When a company absorbs other companies, it is called a merger, and the absorbed company is dissolved. The merger of two or more companies to establish a new company is a new merger, and the merging parties are dissolved.
Article 188 If the price paid for a company's merger does not exceed 10% of the company's net assets, it can be done without a resolution of the shareholders' meeting, except as otherwise provided in these articles of association.
If a company merges in accordance with the provisions of the preceding paragraph without a resolution of the shareholders' meeting, it shall be subject to a resolution of the board of directors.
Article 189 When a company merges, the parties to the merger shall sign a merger agreement and prepare a balance sheet and property list. The company shall notify creditors within 10 days from the date of making the merger resolution, and shall make an announcement in the Shanghai Securities News or other newspapers that meet the conditions prescribed by the China Securities Regulatory Commission or the National Enterprise Credit Information Publicity System within 30 days.
Creditors may require the company to pay off debts or provide corresponding guarantees within 30 days from the date of receipt of the notice, or within 45 days from the date of announcement if no notice is received.
Article 190 When a company merges, the claims and debts of the merging parties shall be inherited by the surviving company or the newly established company after the merger.
Article 191 When a company is divided, its property shall be divided accordingly.
When a company is divided, a balance sheet and property list must be prepared. The company shall notify its creditors within 10 days from the date of making the separation resolution, and shall make an announcement within 30 days in the Shanghai Securities News or other newspapers that meet the conditions prescribed by the China Securities Regulatory Commission or the National Enterprise Credit Information Publicity System.
Article 192 The debts incurred before the division of the company shall be jointly and severally borne by the company after the division. However, this shall not be the case unless otherwise agreed upon in a written agreement between the company and its creditors regarding debt settlement before the division.
Article 193 When the company needs to reduce its registered capital, it must prepare a balance sheet and property list.
The company shall notify creditors within 10 days from the date when the shareholders' meeting makes a resolution to reduce the registered capital, and shall make an announcement within 30 days in the Shanghai Securities News or other newspapers that meet the conditions prescribed by the China Securities Regulatory Commission or the National Enterprise Credit Information Publicity System. Creditors have the right to require the company to pay off debts or provide corresponding guarantees within 30 days from the date of receiving the notice, or within 45 days from the date of announcement if the creditors have not received the notice.
When a company reduces its registered capital, it shall reduce its capital contribution or shares accordingly in proportion to the shares held by shareholders, unless otherwise provided by law or these Articles of Association.
Article 194 If the company still has losses after making up for losses in accordance with the provisions of paragraph 2 of Article 166 of the Articles of Association, it may reduce its registered capital to make up for the losses. If the registered capital is reduced to make up for losses, the company shall not distribute to shareholders, nor may it exempt shareholders from their obligation to pay capital contributions or share payments.
If the registered capital is reduced in accordance with the provisions of the preceding paragraph, the provisions of Paragraph 2 of Article 193 of this Article shall not apply, but an announcement shall be made in the "Shanghai Securities News" or other newspapers that meet the conditions prescribed by the China Securities Regulatory Commission or the National Enterprise Credit Information Publicity System within 30 days from the date when the shareholders' meeting makes a resolution to reduce the registered capital.
After the company reduces its registered capital in accordance with the provisions of the preceding two paragraphs, it shall not distribute profits until the cumulative amount of the statutory reserve fund and discretionary reserve fund reaches 50% of the company's registered capital.
Article 195 If the registered capital is reduced in violation of the Company Law and other relevant regulations, the shareholders shall return the funds received, and those who reduce or reduce the capital contribution shall be restored to their original status; if losses are caused to the company, the shareholders and the responsible directors and senior managers shall bear the liability for compensation.
Article 196 When the company issues new shares to increase its registered capital, shareholders do not have preemptive subscription rights, unless otherwise provided in the Articles of Association or the shareholders' meeting decides that shareholders have preemptive subscription rights.
Article 197 If a company is merged or divided and the registered items are changed, the change registration shall be carried out with the company registration authority in accordance with the law; if the company is dissolved, the company shall be deregistered in accordance with the law; if a new company is established, the company establishment registration shall be carried out in accordance with the law.
If a company increases or decreases its registered capital, it must apply for change registration with the company registration authority in accordance with the law.
Section 2 Dissolution and Liquidation
Article 198 The company is dissolved for the following reasons:
(1) The business period stipulated in these articles of association expires or other reasons for dissolution stipulated in these articles of association occur;
(2) The shareholders’ meeting resolves to dissolve;
(3) Dissolution is required due to company merger or division;
(4) The business license has been revoked, ordered to close, or revoked in accordance with the law;
(5) If the company encounters serious difficulties in its operation and management, and its continued existence will cause heavy losses to the interests of shareholders, and cannot be solved through other means, shareholders holding more than 10% of the voting rights of all shareholders of the company may request the People's Court to dissolve the company.
If a company encounters the reasons for dissolution specified in the preceding paragraph, it shall publicize the reasons for dissolution within 10 days through media newspapers that comply with the regulations of the China Securities Regulatory Commission or the national enterprise credit information publicity system.
Article 199 If the company is subject to the circumstances specified in Items (1) and (2) of Article 198 and has not yet distributed property to shareholders, it may continue to exist by amending the Articles of Association or by resolution of the shareholders' meeting.
Any amendment to the Articles of Association or a resolution of the shareholders' meeting in accordance with the provisions of the preceding paragraph shall be passed by more than 2/3 of the voting rights held by shareholders attending the shareholders' meeting.
Article 200 If a company is dissolved due to the provisions of Items (1), (2), (4) and (5) of Article 198, it shall be liquidated. Directors are the liquidation obligors of the company and shall establish a liquidation group and start liquidation within 15 days from the date of occurrence of the reasons for dissolution. The liquidation team shall be composed of directors or persons determined by resolution of the shareholders' meeting.
If the liquidation obligor fails to perform liquidation obligations in a timely manner and causes losses to the company or creditors, he shall be liable for compensation. If a liquidation group is not established within the time limit for liquidation or if liquidation is not liquidated after a liquidation group is established, interested parties may apply to the People's Court to designate relevant personnel to form a liquidation group for liquidation.
Article 201 The liquidation committee shall exercise the following powers during the liquidation period:
(1) Clean up the company’s properties and prepare a balance sheet and property list respectively;
(2) Notify and announce creditors;
(3) Handle the company’s unfinished business related to liquidation;
(4) Pay the taxes owed and the taxes incurred during the liquidation process;
(5) Clearing claims and debts;
(6) Dispose of the company’s remaining property after paying off its debts;
(7) Participate in civil litigation activities on behalf of the company.
Article 202 The liquidation team shall notify creditors within 10 days from the date of establishment, and shall make an announcement in the Shanghai Securities News or other newspapers that meet the conditions prescribed by the China Securities Regulatory Commission or the National Enterprise Credit Information Publicity System within 60 days. Creditors shall declare their claims to the liquidation team within 30 days from the date of receipt of the notice, or within 45 days from the date of announcement if the notice is not received.
When a creditor declares a creditor's right, he shall explain the relevant matters of the creditor's right and provide supporting materials. The liquidation team shall register the claims.
During the period of reporting claims, the liquidation team shall not pay off creditors.
Article 203 After clearing the company's assets and preparing a balance sheet and property list, the liquidation team shall formulate a liquidation plan and submit it to the shareholders' meeting or the people's court for confirmation.
The company's property is the remaining property after paying liquidation expenses, employees' wages, social insurance fees and statutory compensation, paying taxes owed, and paying off the company's debts respectively, and the company distributes the remaining property according to the proportion of shares held by shareholders.
During the liquidation period, the company continues to exist, but it cannot carry out business activities unrelated to the liquidation. The company's property shall not be distributed to shareholders before it is paid off in accordance with the provisions of the preceding paragraph.
Article 204 If, after cleaning up the company's property and preparing a balance sheet and property list, the liquidation team discovers that the company's property is insufficient to pay off its debts, it shall apply to the People's Court for bankruptcy liquidation in accordance with the law.
After the People's Court accepts the bankruptcy application, the liquidation team shall hand over the liquidation affairs to the bankruptcy administrator designated by the People's Court.
Article 205 After the company's liquidation is completed, the liquidation team shall prepare a liquidation report, submit it to the shareholders' meeting or the people's court for confirmation, and submit it to the company registration authority to apply for cancellation of company registration.
Article 206 Members of the liquidation committee shall perform their liquidation duties and shall have the duty of loyalty and diligence.
If members of the liquidation team neglect to perform their liquidation duties and cause losses to the company, they shall be liable for compensation; if members of the liquidation team cause losses to creditors intentionally or due to gross negligence, they shall be liable for compensation.
Article 207 If a company is declared bankrupt in accordance with the law, bankruptcy liquidation shall be carried out in accordance with the laws on enterprise bankruptcy.
Chapter 10 Modification of the Articles of Association
Article 208 The company shall amend these Articles of Association under any of the following circumstances:
(1) After the Company Law or relevant laws and administrative regulations are revised, the matters stipulated in this Articles of Association conflict with the provisions of the revised laws and administrative regulations;
(2) The company's situation changes and is inconsistent with the matters recorded in these articles of association;
(3) The shareholders' meeting decides to amend the Articles of Association.
Article 209 If the amendments to the articles of association passed by the resolution of the shareholders' meeting are subject to the review and approval of the competent authority, they shall be reported to the competent authority for approval; if they involve company registration matters, the change registration shall be carried out in accordance with the law.
Article 210 The Board of Directors shall amend the Articles of Association in accordance with the resolution of the shareholders’ meeting to amend the Articles of Association and the approval opinions of the relevant competent authorities.
Article 211 Amendments to the Articles of Association are information required to be disclosed by laws and regulations and shall be announced in accordance with regulations.
Chapter 11 Supplementary Provisions
Article 212 In this Articles of Association, the following words have the following meanings:
(1) Controlling shareholders refer to shareholders whose shares account for more than 50% of the company's total share capital; or shareholders who hold less than 50% of the shares, but whose voting rights based on the shares they hold are sufficient to have a significant impact on the resolutions of the shareholders' meeting.
(2) Actual controller refers to a natural person, legal person or other organization that, although not a shareholder of the company, can actually control the company's behavior through investment relationships, agreements or other arrangements.
(3) Related relationships refer to the relationships between the company’s controlling shareholders, actual controllers, directors, and senior managers and the companies they directly or indirectly control, as well as other relationships that may lead to the transfer of the company’s interests. However, state-controlled enterprises are related not only because they are also controlled by the state.
Article 213 The board of directors may formulate detailed rules of association in accordance with the provisions of the articles of association. The articles of association shall not conflict with the provisions of the articles of association.
Article 214 These Articles of Association are written in Chinese. If there is any discrepancy between the Articles of Association in any other language or different versions and the Articles of Association, the Chinese version of the Articles of Association that was most recently approved and registered by the Jixi Municipal Administration for Market Regulation shall prevail.
Article 215 The terms "above", "within" and "below" in this Article include the original number, and "over", "less than", "beyond", "less than" and "more than" do not include the original number.
Article 216 The Board of Directors of the Company shall be responsible for the interpretation of these Articles of Association.
Article 217 The attachments to this Articles of Association include the Rules of Procedure for the Shareholders’ Meeting and the Rules of Procedure for the Board of Directors.
Article 218 This Article of Association shall become effective and implemented after being reviewed and approved by the company's shareholders' meeting.
Heilongjiang Zhenbaodao Pharmaceutical Co., Ltd.
May 25, 2026