Rules of Procedure for the Board of Directors (revised in September 2025)
Lingkang Pharmaceutical Group Co., Ltd. Rules of Procedure for the Board of Directors Lingkang Pharmaceutical Group Co., Ltd.
Board of Directors Rules of Procedure
Chapter 1 General Provisions
Article 1 In order to further standardize the discussion methods and decision-making procedures of the board of directors of Lingkang Pharmaceutical Group Co., Ltd. (hereinafter referred to as the "Company"), urge the directors and the board of directors to effectively perform their duties, and improve the standard operation and scientific decision-making level of the board of directors, 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"), the "Code of Corporate Governance for Listed Companies", the "Stock Listing Rules of the Shanghai Stock Exchange" and other relevant provisions, as well as the "Articles of Association of Lingkang Pharmaceutical Group Co., Ltd." (hereinafter referred to as the "Articles of Association"), these rules are formulated.
Chapter 2 Composition and Powers of the Board of Directors
Article 2 The company shall have a board of directors, which shall consist of seven directors, including one employee representative director and three independent directors. The board of directors shall have a chairman of the board of directors, who shall be elected by a majority of all directors.
Article 3 Directors shall be elected or replaced by the shareholders' meeting, and may be dismissed from their posts by the shareholders' meeting before the expiration of their term. Directors have a three-year term and may be re-elected upon expiration of their term. The company shall have one employee representative director, who shall be democratically elected by the company's employees through the employees' congress, workers' conference or other forms, and does not need to be submitted to the shareholders' meeting for review.
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 fails to be re-elected in time upon expiration of his term or if a director resigns during his term and the number of board members falls below the quorum, the original director shall still perform his duties as a director in accordance with the provisions of laws, administrative regulations, departmental rules and the company's articles of association until the re-elected director takes office.
Directors may concurrently serve as senior managers, but the total number of directors who concurrently serve as senior managers and directors who are employee representatives shall not exceed one-half of the total number of directors of the company.
Article 4 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) Within the scope authorized by the shareholders’ meeting, decide on the company’s external investment, acquisition and sale of assets, asset mortgage, and
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Lingkang Pharmaceutical Group Co., Ltd. Guarantee matters, entrusted financial management, related transactions, external donations and other matters outside the board of directors' procedures;
(8) Decide on the establishment of the company’s internal management organization;
(9) Decide on the appointment or dismissal of the company’s general manager, secretary to the board of directors and other senior managers, and decide on their remuneration, rewards and punishments; based on the nomination of the general manager, decide on the appointment or dismissal of the company’s financial director and other senior managers, and decide on their remuneration, rewards and punishments;
(10) Formulate the company’s basic management system;
(11) Formulate a plan to amend the company’s articles of association;
(12) Management company information disclosure matters;
(13) Propose to the shareholders’ meeting to hire or change the accounting firm to audit the company;
(14) Listen to the work report of the company’s general manager and inspect the manager’s work;
(15) Other powers granted by laws, administrative regulations, departmental rules, company articles of association or shareholders' meeting. Matters beyond the scope of authorization of the shareholders' meeting shall be submitted to the shareholders' meeting for review.
Article 5 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.
If an accounting firm issues a non-standard audit report on the effectiveness of the company's internal control, or points out that there are major deficiencies in the company's internal control over non-financial reporting, the company's board of directors shall make a special explanation of the matters involved.
Article 6 The board of directors shall determine the authority over 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.
Within the scope of its authority, the board of directors reviews the following transactions that occur outside the company's daily operating activities:
(1) Purchase or sell assets;
(2) External investment (including entrusted financial management, investment in subsidiaries, etc.);
(3) Provide financial assistance (including interest or interest-free loans and entrusted loans);
(4) Providing guarantees (including guarantees for holding subsidiaries, etc.);
(5) Lease or lease assets;
(6) Entrust or entrust management of assets and business;
(7) Donating or receiving donated assets;
(8) Creditor's rights and debt restructuring;
(9) Sign a license agreement;
(10) Transfer or transfer of research projects;
(11) Waiver of rights (including waiver of preemptive right, preemptive subscription right of capital contribution, etc.);
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Lingkang Pharmaceutical Group Co., Ltd. Rules of Procedure for the Board of Directors
(12) Other transactions recognized by the Shanghai Stock Exchange.
If the company's major transactions (except daily operating activities and external guarantees, related transactions, financial assistance and other matters) meet one of the following standards, they shall be submitted to the board of directors for review:
(1) The total assets involved in the transaction (if there are both book value and appraisal value, whichever is higher) account for more than 10% of the company's most recent audited total assets;
(2) 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;
(3) The transaction amount (including debts and expenses assumed) accounts for more than 10% of the company’s latest audited net assets, and the absolute amount exceeds 10 million yuan;
(4) The profit generated from 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 1 million yuan;
(5) 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;
(6) 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.
(7) Although the transaction does not meet the aforementioned standards, the board of directors believes after review that it may have a significant impact on the company's production and operations.
If the data involved in the calculation of the above indicators is negative, its absolute value will be used for calculation.
Article 7 Any “financial assistance” transaction that occurs in a company must be reviewed and approved by more than half of all directors, and must also be reviewed and approved by more than two-thirds of the directors present at the board meeting. If a financial assistance matter falls under any of the following circumstances, it shall also be submitted to the shareholders' meeting for review after being reviewed and approved by the board of directors:
(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 circumstances stipulated by the Shanghai Stock Exchange or the company's articles of association.
If the funding object is a holding subsidiary within the scope of the company's consolidated statements, and the other shareholders of the holding subsidiary do not include the company's controlling shareholders, actual controllers and their related parties, the provisions of the preceding paragraph may be exempted from application.
Article 8 The external guarantees stipulated in Article 48 of the company's articles of association that should be approved by the shareholders' meeting must be reviewed and approved by the board of directors and then submitted to the shareholders' meeting for approval. The board of directors decides on external guarantee matters other than those approved by the shareholders' meeting. When the board of directors considers guarantee matters, it must be approved by more than half of all directors, and three votes must be obtained from those present at the board meeting.
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The rules of procedure of the board of directors of Lingkang Pharmaceutical Group Co., Ltd. were reviewed and approved by more than two-thirds of the directors. Related directors should abstain from voting.
If the company provides guarantees to related parties, in addition to the deliberation and approval of a majority of all non-related directors, it must also be reviewed and approved by more than two-thirds of the non-related directors attending the board meeting and a resolution must be made, and submitted to the shareholders' meeting for review. If the company provides guarantees for the controlling shareholder, actual controller and their related persons, the controlling shareholder, actual controller and their related persons shall provide counter-guarantee.
Article 9 If a related-party transaction meets the following standards, the board of directors' review procedures shall be implemented with the consent of more than half of all independent directors:
(1) Related transactions with a transaction amount (including debts and expenses borne) between the company and related natural persons of more than 300,000 yuan (except for guarantees provided by the company);
(2) The transaction amount (including debts and expenses assumed) between the company and related legal persons (or other organizations) is more than 3 million yuan and accounts for more than 0.5% of the absolute value of the company's latest audited net assets (except for the guarantee provided by the company). Related party transactions between the company and related parties shall be calculated cumulatively based on the same transaction category or transactions with the same related party within 12 consecutive months. If the cumulative amount reaches the standard specified in this article, it shall be submitted to the board of directors for review. Those that have been reviewed and approved by the board of directors will no longer be included in the relevant cumulative calculation range.
Article 10 The chairman of the board of directors shall exercise the following powers:
(1) Preside over shareholders’ meetings and convene and preside over board meetings;
(2) Supervise and inspect the implementation of board resolutions;
(3) 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;
(4) Other powers granted by the board of directors.
Article 11 The vice chairman of the company assists the chairman of the board of directors in his work. If the chairman of the board of directors is unable or fails to perform his duties, the vice chairman shall perform his duties. If the vice 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.
Chapter 3 Convening and Convening of Board of Directors Meetings
Article 12 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.
Article 13 Shareholders representing more than one-tenth of the voting rights, more than one-third of the 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 ten days after receiving the proposal.
Article 14 The board of directors shall notify the extraordinary board meeting by: personal delivery, mail, letter, fax, email, telephone or instant messaging software such as WeChat; the notification time limit is: three days in advance.
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Lingkang Pharmaceutical Group Co., Ltd. Board of Directors meeting rules. 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, and with the unanimous consent of all directors, the notice time limit for the extraordinary meeting of the board of directors may be waived.
Article 15 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 16 Board meetings shall be attended by the director in person; if a director is unable to attend for any reason, he may entrust another director in writing to attend on his behalf. The power of attorney shall state the name of the agent, matters of agency, scope of authorization and validity period, and shall be signed or sealed by the principal. The power of attorney should state the name of the agent, matters of agency, scope of authorization and validity period, and should 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.
Article 17 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.
Article 18 The general manager and secretary of the board of directors shall attend board meetings as non-voting delegates; the financial director and deputy general manager may attend board meetings as non-voting delegates based on the needs of the meeting resolutions and with the consent of the convener of the meeting.
Chapter 4 Board of Directors Proceedings and Resolutions
Article 19 The board of directors meeting shall be chaired by the chairman of the board of directors. If the chairman is unable or fails to perform his duties due to special reasons, the vice chairman shall preside over the meeting. If the vice chairman is unable or fails to perform his duties, more than half of the directors shall jointly elect a director to preside over and perform the corresponding duties.
Article 20 Proposals that are included in the meeting agenda and require voting shall be carefully reviewed and discussed before voting. Directors may speak freely or express their opinions in writing.
The general manager and other senior managers who attend the board meeting may express their own suggestions and opinions on matters discussed by the board of directors for reference in decision-making by the directors attending the meeting.
Article 21 The board of directors shall hold meetings and vote on-site or through electronic communication methods such as telephone conferences and video conferences.
Article 22 The directors attending the meeting shall vote on all proposals included on the agenda of the meeting one by one. Unless the board of directors is suspended or unable to make a resolution due to special reasons such as force majeure, the proposals shall not be shelved or voted on. If there are different proposals on the same matter, voting will be carried out in the order in which the proposals are submitted, and the voting results will be based on the
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Lingkang Pharmaceutical Group Co., Ltd. made a resolution according to the rules of procedure of the board of directors.
Article 23 The resolution adopted by the board of directors must be passed by more than half of all directors. When the board of directors considers guarantee matters, it must also obtain the approval of more than two-thirds of the directors present at the board meeting.
Article 24 If a director has a relationship with an enterprise or individual involved in a resolution at a board of directors 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 present at the board of directors is less than 3, the matter shall be submitted to the shareholders' meeting for review.
Article 25 The voting on resolutions of the board of directors shall be based on one person, one vote.
Article 26 The presiding officer of the meeting shall announce whether the resolution of the meeting has been passed based on the voting results, and shall announce the voting results at the meeting. The voting results of the meeting are recorded in the meeting minutes.
Chapter 5 Board of Directors Meeting Minutes and Announcements
Article 27 The board of directors shall make minutes of its decisions on the 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 that explanatory records of their speeches at the meeting be recorded in the minutes.
Article 28 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).
Article 29 The minutes of board meetings shall be kept by the secretary of the board of directors as company files. The retention period of board meeting minutes is 10 years.
Article 30 Announcement of board resolutions shall be handled by the board secretary in accordance with relevant rules. Before the announcement of the resolution is disclosed, the participating directors, meeting attendees, staff, etc. have the obligation to keep the content of the resolution confidential.
Chapter 6 Implementation of Board of Directors Meeting Resolutions
Article 31 Directors shall be responsible for the resolutions of the board of directors. If a resolution of the board of directors violates laws, administrative regulations or the company's articles of association, causing the company to suffer serious losses, the directors who participated in the resolution shall be liable to the company for compensation. However, if it is proved that the director expressed his dissent during the voting and recorded it in the minutes of the meeting, the director may be exempted from liability.
Article 32 The chairman of the board of directors shall continuously supervise the implementation of authorized matters and shall strictly implement and implement them.
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The Rules of Procedure of the Board of Directors of Lingkang Pharmaceutical Group Co., Ltd. urge senior managers to implement resolutions of the shareholders’ meeting, board of directors resolutions and other relevant resolutions.
Chapter 7 Supplementary Provisions
Article 33 These rules shall take effect and be implemented from the date of review and approval by the shareholders' meeting.
Article 34 Matters not covered in these rules shall be implemented in accordance with the relevant provisions of relevant laws, administrative regulations, departmental rules and the company's articles of association; when these rules are inconsistent with the "Company Law", "Securities Law" and other laws, regulations and other normative documents, as well as the company's articles of association, the relevant laws, regulations, normative documents and the company's articles of association shall be implemented.
Article 35 The shareholders’ meeting authorizes the board of directors to interpret these rules.
Lingkang Pharmaceutical Group Co., Ltd. September 2025
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