Articles of Association of ADAMA Ltd.
November 2024
(Amended)
Catalog
Chapter 1 General Provisions ........................................................................................................... 1
Chapter 2 The Business Purpose and Scope of the Company ........................................................... 2
Chapter 3 Shares ............................................................................................................................... 3
Section 1 Share Offering ........................................................................................................... 3
Section 2 Share Increase, Decrease and Repurchase ................................................................ 4
Section 3 Share Transfer ........................................................................................................... 5
Chapter 4 Shareholders and Shareholders’ meetings ........................................................................ 6
Section 1 Shareholders .............................................................................................................. 6
Section 2 General Provisions of Shareholders’ Meetings ....................................................... 12
Section 3 Convening of Shareholders’ meetings..................................................................... 14
Section 4 Proposal and Notice of Shareholders’ meetings ...................................................... 16
Section 5 Holding of Shareholders’ Meetings......................................................................... 18
Section 6 Vote and Resolution of Shareholders’ meetings ...................................................... 22
Chapter 5 Board of Directors .......................................................................................................... 29
Section 1 Directors .................................................................................................................. 29
Section 2 Board of Directors ................................................................................................... 33
Chapter 6 Party Committee ............................................................................................................. 41
Chapter 7 President and CEO and Other Senior Executives ........................................................... 42
Chapter 8 Board of Supervisors ...................................................................................................... 45
Section 1 Supervisors .............................................................................................................. 45
Section 2 Board of Supervisors ............................................................................................... 46
Chapter 9 Financial and Accounting Systems, Profit Distribution and Auditing ............................ 48
Section 1 Financial and Accounting Systems ......................................................................... 48
Section 2 Internal Audit .......................................................................................................... 52
Section 3 Appointment of Accounting Firms .......................................................................... 52
Chapter 10 Notices and Announcements ........................................................................................ 53
Section 1 Notice ...................................................................................................................... 53
Section 2 Announcement ........................................................................................................ 54
Chapter 11 Merger/Consolidation, Spin-off, Capital Increase, Capital Reduction, Dissolution and
Liquidation ...................................................................................................................................... 54
Section 1 Merger/Consolidation, Spin-off, Capital Increase and Capital Reduction .............. 54
Section 2 Dissolution and Liquidation .................................................................................... 55
Chapter 12 Amendments to the Articles of Association .................................................................. 58
Chapter 13 Supplementary Provisions ............................................................................................ 59
Chapter 1 General Provisions
Article 1 These Articles of Association of ADAMA Ltd.(hereinafter referred
to as “Company”) are formulated pursuant to the Company Law of the People's
Republic of China (hereinafter referred to as “Company Law”), the Securities Law of
the People's Republic of China (hereinafter referred to as “Securities Law”) and other
related provisions, with a view to safeguarding the legitimate rights and interests of the
Company, its shareholdings and creditors, and regulating the organizational structures
and acts of the Company.
In accordance with the Charter of the Communist Party of China (“CPC”) and the
Regulation on the work at primary-level Party organizations of State-owned enterprises
(for Trial Implementation), the Company shall establish the organization of the CPC,
the Party Committee shall act as a leading role, lead the direction, take charge of overall
situations and ensure the implementation of the decisions, and discuss and decide major
issues of the enterprise in accordance with regulations. The Company shall establish
the working organization of the Party, have Party personnel in accordance with the law
and guarantee there are adequate funds for the work of Party organization.
Article 2 The Company was restructured from former Shashi Pesticide Factory
of Hubei Province as a company limited by shares in accordance with the Company
Law and other relevant provisions.
As approved in “E Gai [1992]02” Document issued by the Commission for Economic
Restructuring of Hubei Province, the company is established as per raising capital by
private placement, registered with the Administration for Industry and Commerce at
Hubei Province, and obtained its business license. The social credit code of the
Company is 91420000706962287Q.
Article 3 With the approval of the China Securities Regulatory Commission
(hereinafter referred to as “CSRC”) in “Zheng Jian Fa Shen [1993] 70” Document dated
September 27, 1993, the Company initially offered 30,000,000 ordinary Renminbi
common shares which shall be subscribed by inbound investors by Renminbi to the
public, and was listed on Shenzhen Stock Exchange on December 3, 1993; on April 25,
2017, with the approval of the Securities Commission of the State Council in “Zheng
Wei Fa[1997]23” Document, the Company initially offered 115,000,000 domestically
listed foreign-funded shares which shall be listed domestically and subscribed by
foreign currency to outbound investors and was listed on Shenzhen Stock Exchange on
May 15 and 25, 1997.
Article 4 Registered name of the Company
Full name in Chinese: 安道麦股份有限公司
Full name in English: ADAMA Ltd.
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Article 5 Domicile of the Company: No. 93, Beijing East Road, Jingzhou,
Hubei Province, Postal code: 434001. Manufacture address of the Company are: No.
93, Beijing East Road, Jingzhou, Hubei Province and No. 16, Hongtang Road, Jingzhou
Development Zone, Jingzhou, Hubei Province.
Article 6 Registered capital of the Company shall be Renminbi 2,329,811,766.
Article 7 The Company shall be a permanent company limited by shares.
Article 8 The President and CEO shall act as the legal representative of the
company.
Article 9 All the assets of the Company shall be divided into equal shares.
Shareholders shall bear responsibilities to the Company to the extent of their shares and
the Company shall be liable for the Company's debts with all of its assets.
Article 10 These Articles of Association shall, as of the date when they come
into force, become a document legally binding upon the organizational structure and
acts of the Company, upon the relationship of rights and obligations between the
Company and its shareholders and between or among shareholders themselves, and
upon the Company, its shareholders, directors, supervisors and senior executives. The
shareholders may, in accordance with these Articles of Association, bring lawsuits
against other shareholders, or the Company's directors, supervisors, President and CEO
and other senior executives, or the Company. The Company may also bring lawsuits
against its shareholders, directors, supervisors, President and CEO and other senior
executives.
Article 11 “Other senior executives” where used in these Articles of Association shall
refer to Chief Financial Officer and the secretary of the board of directors following
their appointment as senior executives by the board of directors.
Chapter 2 The Business Purpose and Scope of the Company
Article 12 The business purpose of the Company is to take the comprehensive
advantages, promote technological progress, strengthen the development of agricultural
chemicals and related industries, improve the domestic and foreign market share,
strengthen enterprise management, improve economic efficiency, and ensure asset
value increase.
Article 13 Subject to registration according to the law, the Company's business
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scope is: Licensed items: pesticide production, pesticide wholesale, pesticide retail,
production of specific organic chemicals containing phosphorus, sulfur and fluorine in
the second, third and fourth categories of monitored chemicals, operation of the second
category of monitored chemicals, production of hazardous chemicals, operation of
hazardous chemicals, import and export of toxic chemicals, power generation business,
power transmission business, power supply (distribution) business, non-coal mineral
resources mining. (Items subject to approval in accordance with the law can only be
carried out after approval by the relevant departments, and the specific business items
are subject to the approval documents or licenses of the relevant departments.)
General items: production of Class II non-pharmaceutical chemicals easy to
manufacture poisons, operation of Class II non-pharmaceutical chemicals easy to
manufacture poisons, production and operation of Class III non-pharmaceutical
chemicals easy to manufacture poisons, production of chemical products (excluding
licensed chemical products), sale of chemical products (excluding licensed chemical
products), manufacture of special chemical products (excluding hazardous chemicals),
sale of special chemical product sales (excluding hazardous chemicals), oil refining,
manufacturing of special equipment for chemical production, sales of special
equipment for oil refining and chemical production, heat production and supply, import
and export of goods, import and export of technology, technical services, technology
development, technology consulting, technology exchanges, technology transfer,
technology promotion, new materials technology research and development, bio-
pesticide technology research and development, bio-chemical products technology
research and development, agricultural scientific research and experimental
development, metal structure manufacturing and sales, loading, unloading and freight,
general cargo warehousing services (excluding hazardous chemicals and other projects
requiring licensing approval). (In addition to the licensed business, it can independently
operate business involving non-prohibited or restricted projects in accordance with the
laws and regulations.)
Chapter 3 Shares
Section 1 Share Offering
Article 14 The shares of the Company shall take the form of stocks.
Article 15 The shares of the Company are offered in an open, impartial and fair
manner. Shares of the same kind shall enjoy the same and equal rights.
For shares of the same kind offered at the same time, the issuing conditions and prices
of each of such shares shall be the same; for shares subscribed by any unit or individual,
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each of such shares shall be paid at the same value.
Article 16 The face value of each shares offered by the Company shall be
Renminbi 1.
Article 17 Shares issued by the Company shall be uniformly deposited at
Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.
Article 18 In August, 1992, the Bureau for State Property Administration of
Shashi, Hubei Province converted net operating assets in total amount of Renminbi
60,764,900 into capital contribution as 59,663,400 State shares, and raised capital by
private placement from the employees, who subscribed 15,270,500 shares to establish
the Company.
Article 19 The total number of the Company's shares is 2,329,811,766, among
which 2,177,071,961 Renminbi ordinary shares, 152,739,805 domestically listed
foreign-funded shares.
Article 20 The Company or its subsidiaries (including its affiliated enterprises)
shall not, by such means as donation, advancement, guarantee, compensation, loan or
otherwise, provide anyone who purchases or plans to purchase the Company's shares
with financial assistance.
Section 2 Share Increase, Decrease and Repurchase
Article 21 The Company may, for the purpose of its operation and development
and in accordance with the laws and regulations, adopt the following means for increase
in its capital following resolutions respectively adopted by the shareholders’ meeting:
(1) public offering of shares;
(2) private offering of shares;
(3) issuing bonus shares to current shareholders;
(4) converting the common reserve fund into the share capital; or
(5) other means as prescribed by laws and administrative regulations and approved by
the CSRC.
Article 22 The Company may reduce its registered capital. If its registered capital
is reduced, the Company shall comply with the Company Law, and other relevant
provisions and procedures as prescribed in these Articles of Association.
Article 23 The Company shall not acquire its own shares, except under any of the
following circumstances:
(1) decreasing the Company's registered capital;
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(2) merging/consolidating with other companies holding the shares of the Company;
(3) Use of shares for employee stock ownership plans or equity incentives;
(4) where shareholders raise objections to resolutions by the shareholders’ meeting on
the merger or spin off of the Company, and thus require it to acquire its own shares;
(5) Use of shares for conversion of convertible corporate bonds issued by the Company;
or
(6) It is necessary for maintaining the value of the Company and shareholders' equity.
Article 24 Buyback of shares by the Company may be carried out through open
centralized trading, or via any other method recognized by laws and regulations and the
CSRC.
A share buyback by the Company under the circumstances stipulated in item (3), item
(5) or item (6) of Article 23 shall be carried out via an open centralized trading method.
Article 25 A resolution of a shareholders meeting is required for a share buyback
by the Company under any of the circumstances stipulated in item (1) and item (2) of
Article 23; a resolution of the Board meeting presented by two-thirds or more of the
directors is required for a Company's share buyback under any of the circumstances
stipulated in item (3), item (5) and item (6) of Article 23.
Where a share buyback by the Company pursuant to the provisions of Article 23 falls
under the circumstances set out in item (1), the shares shall be deregistered within 10
days from the date of buyback; where a share buyback by the Company pursuant to the
provisions of Article 23 falls under the circumstances set out in item (2) or item (4), the
shares shall be transferred or deregistered within six months; where a share buyback by
the Company pursuant to the provisions of Article 23 falls under the circumstances set
out in item (3), item (5) or item (6), the total number of shares held by the Company
shall not exceed 10% of the total number of shares issued by the Company, and the
shares shall be transferred or deregistered within three years.
Section 3 Share Transfer
Article 26 The Company shares may be transferred according to the law.
Article 27 The Company shall refuse to have its own stocks as the collateral of
pledge.
Article 28 The directors, supervisors and senior executives of the Company shall
report to the Company their shares in the Company and any alterations to the shares so
held, and the shares transferred annually by them during their terms of office shall not
exceed 25% of their total shares in the Company; their shares in the Company shall not
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be transferred within the first year after the Company's stocks are listed. The aforesaid
persons shall not transfer their shares in the Company for the period of six months after
they resign from the Company.
Article 29 Where the Company's shareholders which hold more than 5% of the
total shares of the Company, directors, supervisors and senior executives sell their
stocks or other securities of equity nature within six months after having bought them,
or repurchase them within six months after having sold them, all earnings thus obtained
shall be confiscated by the Company and be revoked by the board of directors of the
Company. However, exception applies where a securities company holds more than 5%
of the Company’s shares due to purchase of any remaining shares in a best efforts
underwriting, or where there are any other circumstances stipulated by the CSRC.
Shares or other securities of equity nature held by directors, supervisors, senior
executives and natural-person shareholders referred to in the preceding paragraph shall
include shares or other securities of equity nature held by their spouse, parents, children,
and held by them using other's accounts.
Where the board of directors refuses to comply with the provisions of this Article 29,
the shareholders shall have the right to order the enforcement by the board of directors
of the said provisions within 30 days. Where the board of directors fails to observe the
provisions of this Article 29 within the aforesaid time limit, the shareholders shall be
entitled to, in their own names, directly file a suit with the people's court for the benefits
of the Company.
Where the board of directors refuses to comply with the first paragraph of this Article,
the responsible directors shall bear joint and several liabilities according to law.
Chapter 4 Shareholders and Shareholders’ meetings
Section 1 Shareholders
Article 30 The Company shall, according to the evidence provided by Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited, prepare a
register of shareholders, which serves as sufficient evidence for the Company's shares
held by the shareholders. Shareholders shall enjoy rights and bear responsibilities
according to the kinds of shares held by them; shareholders with the same kind of shares
shall enjoy equal rights and bear the same obligations.
Article 31 When the Company holds the shareholders’ meeting, distributes stock
dividends, goes into liquidation proceedings or conducts other acts requiring the
identification of shareholders, the board of directors or the convener of the shareholders’
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meeting shall decide on the equity registration date and shareholders who are recorded
in the said register after the closing of the equity registration date shall be the
shareholders entitled to the relevant rights and interests.
Article 32 Shareholders of the Company are entitled to the following rights:
(1) obtaining the dividends or other forms of interest distributions according to the
numbers of shares held by them;
(2) legally proposing, convening, presiding over, attending or entrusting shareholders'
proxies to attend the shareholders’ meeting and exercising the relevant voting rights;
(3) supervising over, giving recommendations on or inquiring about the business
operation of the Company;
(4) transferring, donating or pledging their shareholdings in accordance with laws,
administrative regulations and the provisions hereof;
(5) having access to these Articles of Association, register of shareholders, stubs of
Company debentures, minutes of the shareholders’ meeting, resolutions of the
board of directors, resolutions of the board of supervisors, and financial and
accounting statements;
(6) participating in the distribution of the Company's remaining properties in
accordance with their shareholdings, upon the termination or liquidation of the
Company;
(7) demanding the Company to acquire the shares of the shareholders who raise
objections to the merger/consolidation and spin-off resolutions adopted by the
shareholders’ meeting; and
(8) other rights prescribed in laws, administrative regulations and regulations, other
regulations of ministries and commissions, and the provisions of these Articles of
Association.
Article 33 Where requesting access to the information mentioned in the
preceding Article, or asking for the relevant documents, the shareholders shall provide
the Company with written documents evidencing the kinds of Company's shares they
hold and the number of such shareholdings, and the Company, after verifying the
identity of the shareholders, shall provide them with the said information and relevant
documents as per the requirements of the shareholders according to the law.
Article 34 Where the resolutions adopted by the shareholders’ meeting and the
meeting of the board of directors violate laws and administrative regulations and
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regulations, the shareholders shall be entitled to request judgment by the people's court
that such resolutions are null and void.
Where the convening procedures and voting methods of the shareholders’ meeting and
board of directors violate laws, administrative regulations or these Articles of
Association, or the contents of the resolutions adopted by the shareholders’ meeting
and the meeting of the board of directors contravene these Articles of Association, the
shareholders shall be entitled to, within 60 days from the date of such resolutions are
made, request their revocation by the people's court.
Article 35 Where the directors and the senior executives violate any laws,
administrative regulations or any of Articles of Association in fulfilling their duties and
thereby cause losses to the Company, the shareholders who for more than 180
consecutive days hold singly or jointly over 1% of the Company's shares shall be
entitled to request in writing the board of supervisors to file a suit with the people's
court; where the board of supervisors violates any laws, administrative regulations or
any of Articles of Association in fulfilling its duties and thereby causes losses to the
Company, the shareholders may request in writing the board of directors to file a suit
with the people's court.
Where the board of directors and the board of supervisors refuse to file lawsuits after
having received a written request from the shareholders as described in the preceding
paragraph, or fail to file a suit with the people's court within 30 days after their receipt
of such requests, or under any emergency, failure to immediately file lawsuits may
possibly cause irreparable losses to the Company, the shareholders as prescribed in the
preceding paragraph shall be entitled to file suits directly to the people's court in their
own names.
Where the infringement of the lawful rights and interests of the Company by another
has caused losses to the Company, the shareholders as prescribed in the first paragraph
of this Article may in line with the provisions described under the preceding two
paragraphs file a suit with the people's court.
Article 36 Where the violation of laws, administrative regulations or the
provisions hereof by the directors and senior executives has caused losses to the
shareholders, the shareholders may file a suit with the people's court.
Article 37 The shareholders of the Company shall bear the following obligations:
(1) observing laws, administrative regulations, and these Articles of Association;
(2) paying the capital according to the shares subscribed by them and the method of
their capital contributions;
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(3) not to withdraw their shares unless otherwise specified by laws, rules and
regulations; and
(4) not to abuse shareholder's rights to harm the interests of the Company or other
shareholders; not to abuse the independent legal person status of the Company and
the limited liabilities of shareholders to harm the interests of the creditors of the
Company;
(5) other obligations which shall be born in line with the laws, administrative
regulations and the provisions hereof.
Where abuse by the Company's shareholders of their rights has caused losses to the
Company or other shareholders, such shareholders shall bear the compensation
liabilities in accordance with the law.
Where the abuse by the Company's shareholders of the Company's independent legal
person status and the shareholders' limited liabilities, for evasion of their debts, has
seriously damaged the interests of the creditors, such shareholders shall bear several
and joint liabilities for the debts of the Company.
Article 38 If shareholders with more than 5% of the voting shares of the
Company pledge their shareholdings, they shall submit a report in writing to the
Company on the day of the said pledge.
Article 39 Controlling shareholders and actual controllers of the Company shall
not use their affiliated relationships to harm the interests of the Company. Otherwise,
they shall be liable to compensate the Company against losses the Company suffered
due to such violation of the regulations.
Controlling shareholders and actual controllers shall act in good faith to the Company
and other public shareholders thereof. Controlling shareholders shall strictly and legally
exercise the rights of capital contributors and shall not impair the lawful rights of the
Company and other public shareholders by such means as profit distribution, assets
restructuring, external investment, appropriation of funds, borrowing and loan
guarantee, nor shall they with their controlling status damage the interests of the
Company and other public shareholders.
The transaction between the Company and the controlling shareholders or actual
controllers regarding provision of funds, commodities and services and other asset shall
strictly comply with decision-making procedures of affiliate transaction and fulfilling
examination and deliberation procedure of the board of directors and shareholders’
meeting, the affiliated director and shareholder shall withdraw from voting. The
Company shall not provide funds, commodities, services or other asset to the
shareholder and actual controller without consideration or on manifestly unfair terms;
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or provide guarantee to a shareholder or actual controller that is noticeably unable to
make repayment; or providing guarantee to a shareholder or actual controller without
justifiable reasons; or relinquish debt against a shareholder or actual controller without
justifiable reasons; or assume debts of a shareholder or actual controller without
justifiable reasons.
The directors, supervisors and senior executives of the Company shall have the
obligation to preclude the asset of the Company from being occupied by a controlling
shareholder or its affiliated enterprise. Where the directors and senior executives of the
Company assist and connive a controlling shareholder or its affiliated enterprise to
misappropriate the asset of the Company, the board of directors of the Company shall,
in the light of the seriousness of the circumstances, circulate a notice of criticism or
warn against the direct responsible person, and submit the issue of whether to remove
a director who bears serious responsibility to the shareholders’ meeting for vote. The
board of directors of the Company shall establish the mechanism “freezing upon
embezzlement” applicable to the shares held by the controlling shareholder, namely, in
case that the controlling shareholder and its subsidiaries are discovered to embezzle the
Company’s assets, an application shall be immediately submitted to the judicial
authority pursuant to the law for the judicial freezing of the shares held by the
controlling shareholder so that the embezzled assets which cannot be recovered in cash
may be recovered through the sale of the frozen shares. The chairman of the board of
directors of the Company shall be the person undertaking the primary responsibilities
for the mechanism “freezing upon embezzlement”, and the Chief Financial Officer, the
secretary of the board of directors shall assist the chairperson of the board of directors
in conducting the work of “freezing upon embezzlement”
The specific implementing procedures are as follows:
1. The Chief Financial Officer, upon discovering that a controlling shareholder
misappropriate the asset of the Company, shall report to the chairman of the board
of directors in writing on the same day of such discovery; where the chairman of
the board of directors is a controlling shareholder, the Chief Financial Officer shall
report to the chairman of the board of directors, and, at the same time, report to the
secretary of the board of directors and chairman of the supervisory board in writing
on the day of discovering that a controlling shareholder misappropriated the asset
of the Company; the content of the report shall include the name of the controlling
shareholder which occupies the asset, the name of the occupied asset, the time
period of occupation, the amount of money involved and estimated term of
compensation, etc.; where it is discovered that a director or senior executive assist
or connive a controlling shareholder or its affiliated enterprise to misappropriate
the asset of the Company, the Chief Financial Officer shall specify the name and
the circumstances of assistance and connivance to the controlling shareholder or
its affiliated enterprise to misappropriate the asset of the Company of the director
or senior executive involved in the written report.
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2. The chairman of the board of directors shall urge the secretary of the board of
directors to inform the directors in writing or by email and convene an interim
meeting of the board of directors to examine and deliberate the term of
compensation for the controlling shareholder, the decision of punishment against
the responsible director or senior executive and application for freeze of the shares
of the controlling shareholder with judicial department, etc. according to the
written report of the Chief Financial Officer; if the chairman of the board of
directors is a controlling shareholder or a controlling shareholder of a controlling
shareholder of the Company, the secretary of the board of directors shall
immediately inform the directors in writing or by email following the receipt of the
written report of the Chief Financial Officer and convene an interim meeting of the
board of directors according to the Company Law and these Articles of Association
to examine and deliberate the term of compensation for the controlling shareholder,
the decision of punishment against responsible director or senior executive and
application for freeze of the shares of the controlling shareholder with judicial
department, etc., and affiliated directors shall withdraw from examination and
deliberation; for directors who bears serious responsibility, the board of directors
shall submit them to shareholders’ meeting for vote after examining and
deliberating relevant punishment decision.
3. The secretary of the board of directors shall send compensation notice within given
time period to the controlling shareholder, execute the punishment decision against
relevant director or senior executive, and apply for judicial freeze of the shares of
the controlling shareholder with judicial department, etc. and conduct information
disclosure thereof according to the resolution of the board of the directors; the
Company and the board of directors of the Company shall provide convenience to
the secretary of the board of directors for the said items, including issuing letter of
authorization, provide guarantee for judicial freeze, approve the secretary of the
board of directors to engage professional parties to assist and bear the cost, etc.;
the secretary of the board of directors shall inform the director who bears serious
responsibility in time after relevant items are examined, deliberated and approved
by the shareholders’ meeting, and draft relevant punishment documents and handle
with relevant procedures.
4. If the controlling shareholder fails to compensate within the given time period, the
Company shall apply relevant judicial department to realize the shares frozen to
compensate the misappropriated asset within 30 days after the expiration of the
given time period, and the secretary of the board of directors shall conduct relevant
information disclosure.
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Section 2 General Provisions of Shareholders’ Meetings
Article 40 The shareholders’ meeting is the organ of power of the Company and
shall exercise the following powers and functions:
(1) deciding on the business direction and investment plan of the Company;
(2) electing and replacing the posts of the directors and supervisors that are not taken
by the representatives of the staff and workers, and deciding on the remunerations
of such directors and supervisors;
(3) examining, deliberating and approving the board of directors' report;
(4) examining, deliberating and approving the board of supervisors' report;
(5) examining, deliberating and approving the annual financial budget plan and final
calculation plan of the Company;
(6) examining, deliberating and approving the Company's profit distribution plan and
plan to recover the Company's losses;
(7) adopting resolutions on increase or decrease in the Company's registered capital;
(8) adopting resolutions on issuance of the Company bonds
(9) adopting resolutions on the merger/consolidation, spin-off, dissolution, liquidation
or change of Company type of the Company;
(10) amending these Articles of Association;
(11) making resolutions on the appointment or dismissal by the Company of an
accounting firm;
(12) examining, deliberating and approving the guarantee particulars prescribed in
Article 41 hereof;
(13) examining, deliberating matters regarding the purchase and sales within one year
by the Company of major assets which exceed 30% of the latest audited total assets
of the Company;
(14) examining, deliberating and approving and altering the usage of the funds raised;
(15) examining and deliberating the stock incentive plan and employee stock ownership
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plans; and
(16) examining and deliberating other matters which shall be decided by the
shareholders’ meetings according to the laws, administrative regulations,
regulations of ministries and commissions or provisions hereof.
Article 41 The below listed external guarantee of the Company shall be
approved by the shareholders’ meeting after examination and deliberation:
(1) Any guarantee made by the Company after the total amount of external guarantees
offered by the Company and any of the Company's controlled subsidiaries exceeds
50% of the latest audited net assets;
(2) Any guarantee made by the Company after the total amount of external guarantees
offered by the Company and any of the Company's controlled subsidiaries exceeds
30% of the latest audited total assets;
(3) The amount of external guarantees provided by the Company within one year
exceeds 30% of the Company's latest audited total assets;
(4) Any guarantee provided to any party whose asset-liability ratio exceeds 70%;
(5) Any single guarantee with amount exceeding 10% of the latest audited net assets;
or
(6) Any guarantee provided to the shareholders, the actual controllers or their affiliated
parties.
If the Company's external guarantee violates the approval authority and deliberation
procedure, causing losses to the Company, the relevant responsible person shall bear
the responsibility of compensation, and the Company will give the relevant responsible
person corresponding punishment according to the economic loss suffered by the
Company and the severity of the situation.
Article 42 There are the annual shareholders’ meeting and the interim
shareholders’ meeting. The annual shareholders’ meeting shall be held once a year, and
within six months from the end of the last fiscal year.
Article 43 The interim shareholders’ meeting shall be held by the Company
within two months of when one of the following circumstances occurs:
(1) The number of directors is less than the minimum number stipulated under the
Company Law or 2/3 of the number of directors in Article 105 of this AOA;
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(2) The number of independent directors is less than 1/3 of the number of all directors;
(3) Unrecovered Company losses have reached 1/3 of the total amount of the paid-up
capital;
(4) Shareholders that separately or jointly hold more than 10% of the Company's shares
request to hold an interim shareholders’ meeting;
(5) The board of directors deems it necessary to hold an interim shareholders’ meeting;
(6) The board of supervisors proposes to hold an interim shareholders’ meeting; or
(7) Other circumstances prescribed in laws, administrative regulations, regulations of
ministries and commissions or these Articles of Association.
Article 44 The location of the shareholders’ meeting shall be the domicile of the
Company or other place as set forth in the notice of the shareholders’ meeting.
The shareholders' meeting will be on-site meeting. The Company will also provide
online voting to facilitate the shareholders in attending the meeting. If shareholders
attend the shareholders' meeting by the aforesaid means, they shall be deemed to have
been present.
Article 45 The Company shall engage a law firm to issue legal opinions on the
following matters when holding the shareholders’ meeting:
(1) Whether the convention of the meeting and holding procedures are in line with laws,
administrative regulations, and the provisions hereof;
(2) Whether the qualifications of the attendees and convener are lawful and effective;
(3) Whether the voting procedures and results of the meeting are lawful and effective;
and
(4) Legal opinions issued upon the request of the Company on other relevant issues.
Section 3 Convening of Shareholders’ meetings
Article 46 The independent directors shall have the right to propose the convening
of the interim shareholders’ meeting to the board of directors. With regard to such
proposal, the board of directors shall, in accordance with the provisions of the laws,
administrative regulations, and provisions of these Articles of Association, provide its
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feedback in writing on approval or disapproval within 10 days from the date of the
receipt of the said proposal.
Where the board of directors approves the convening of the interim shareholders’
meeting, it shall give notice thereof within five days after the said approval resolution
of the board of directors; otherwise, the reasons for such disapproval shall be stated and
announced.
Article 47 The board of supervisors shall have the right to propose the convening
of the interim shareholders’ meeting and shall submit its proposal to the board of
directors in writing. The board of directors shall, in accordance with the provisions of
the laws, administrative regulations and these Articles of Association, provide feedback
in writing on approval or disapproval within 10 days from the date of the receipt of the
said proposal.
Where the board of directors approves the convening of interim shareholders’ meetings,
it shall send a notice thereof within five days after the approval resolution of the board
of directors. Where the notice changes the original proposal, the approval of the board
of supervisors shall be required.
Where the board of directors disapproves the convening of the interim shareholders’
meeting or fails to provide its feedback within 10 days from the date of the receipt of
the said proposal, it shall be deemed incapable or fail to fulfill the obligation of
convening the shareholders’ meeting; the board of supervisor may thereby convene and
preside over the meeting on its own.
Article 48 The shareholders singly or jointly holding more than 10% of the shares
of the Company shall have the right to propose in writing to the board of directors the
convening of the interim shareholders’ meeting. The board of directors shall, in
accordance with the provisions in laws, administrative regulations and these Articles of
Association, provide feedback in writing on the approval or disapproval within 10 days
from the date of the receipt of such proposal.
Where the board of directors approves the convening of the interim shareholders'
meeting, it shall, within five days after the approval resolution of the board of directors,
give notice thereof. Where the notice alters the original proposal, the approval of the
relevant shareholders shall be required.
Where the board of directors disapproves the convening of the interim shareholders'
meeting or fails to provide feedback within 10 days from the date of the receipt of the
said proposal, the shareholders which singly or jointly hold more than 10% of the shares
of the Company shall have the right to propose in writing the convening of the interim
shareholders’ meeting to the board of supervisors and shall raise their request in writing
to the board of supervisors.
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Where the board of supervisors approves the convening of the interim shareholders’
meeting, it shall within five days from the date of the receipt of the said written request
give notice thereof. If the notice changes the original proposal, the approval of the
relevant shareholders shall be required.
Where the board of supervisors fails to send the said notice within the prescribed time
limit, it shall be deemed that they failed to convene and preside over the shareholders’
meeting and shareholders which singly or jointly hold more than 10% of the Company's
shares for more than 90 consecutive days may convene and preside the meeting
independently.
Article 49 Where the board of supervisors or the shareholders decide to convene
the shareholders' meeting independently, they shall notify the board of directors in
writing to such effect and file with the stock exchange.
Prior to the announcement of the resolution of the shareholders’ meeting, the total
shares of the convening shareholders shall not be less than 10%.
The board of supervisors or the convening shareholders shall, upon sending the notice
of the shareholders’ meeting and announcing the resolutions of the shareholders’
meeting, submit related certificates to the stock exchange.
Article 50 With respect to shareholders’ meetings independently convened by the
board of supervisors or the shareholders, the board of directors and the secretary of the
board of directors shall give their cooperation. The board of directors shall provide the
register of shareholders of equity registration date.
Article 51 Where the shareholders’ meeting is held independently by the board of
supervisors or shareholders, all necessary costs and expenses of the meeting shall be
borne by the Company.
Section 4 Proposal and Notice of Shareholders’ meetings
Article 52 The contents of a proposal shall be amongst the functions and powers
of the shareholders’ meeting, have clear topics for discussion and detailed resolution
matters, and be in line with the relevant provisions of the laws, administrative
regulations and these Articles of Association.
Article 53 Where the Company holds the shareholders’ meeting, the board of
directors, the board of supervisors and the shareholders that singly or jointly hold more
than 3% of the Company's shares shall have the right to raise proposals to the Company.
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The shareholders that singly or jointly hold more than 3% of the Company's shares may,
10 days prior to the convention of the shareholders’ meeting, raise the interim proposals
and submit them in writing to the convener. The convener shall, within two days after
receipt of such proposals, issue a supplementary notice of the shareholders’ meeting,
and announce the contents of the interim proposals.
Except for the circumstances prescribed in the preceding paragraph, the convener, after
having issued the notice of the shareholders’ meeting, shall not amend proposals which
have been expressly set out or add new proposal to the said notice.
Proposals which are not listed in the said notice or are inconsistent with Article 52 of
these Articles of Association shall not be voted on or resolved on the shareholders’
meeting.
Article 54 For the annual shareholders’ meeting, the convener shall by
announcement notify all the shareholders 20 days prior to the convention of the said
meeting. For the interim shareholders’ meeting, the convener shall by announcement
notify all the shareholders 15 days in advance. When calculating the notice period, the
day when the meeting is held shall not be included.
Article 55 The notice of the shareholders’ meeting shall include the following
contents:
(1) time, place and time limit of the shareholders’ meeting;
(2) matters and proposals submitted to the shareholders’ meeting for its examination
and deliberation;
(3) clearly written explanation: all shareholders shall have the right to attend the
shareholders’ meeting and may in writing entrust their proxies to attend the meeting
and participate in votes. The proxies of the shareholders may not necessarily be the
shareholders of the Company;
(4) equity registration date of any shareholder entitled to attend the shareholders’
meeting;
(5) name and telephone number of the contact person in charge of shareholders’
meeting matters; and
(6) the time and procedure of voting online or by any other means.
Article 56 Where the shareholders’ meeting intends to discuss matters related to
the election of directors and supervisors, the notice of the shareholders’ meeting shall
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fully disclose detailed information about such directors and supervisors, including at
least the following contents:
(1) such personal information as the education background, working experience, part-
time job and so on;
(2) whether the candidates for directors or supervisors have affiliated relationship with
the Company or its controlling shareholders and the actual controllers；
(3) disclose the number of Company shares held by the candidates for directors or
supervisors; and
(4) whether candidates for directors or supervisors have received punishments by the
CSRC or other departments or warning reprimands from the stock exchange.
Except for the election of directors and supervisors by means of a cumulative voting
system, each director or supervisor candidate shall be nominated in a single proposal.
Article 57 Once the notice of the shareholders’ meeting is issued, the shareholders’
meeting shall not be postponed or canceled without justifiable cause, nor shall the
proposals set out in the shareholders’ meeting notice be canceled. In the case of the said
postponement or cancellation, the convener shall make an announcement stating
reasons for such postponement or cancellation at least two working days in advance of
the original date for holding the shareholders’ meeting.
Section 5 Holding of Shareholders’ Meetings
Article 58 The board of directors and other conveners of the Company shall take
necessary measures to ensure the normal order of the shareholders’ meetings. The board
of directors and other conveners of the Company shall take measures to prevent acts
which interfere with the shareholders’ meeting, cause disturbance or infringe on the
lawful rights of the shareholders, and shall promptly report such acts to the relevant
departments for investigation and punishment.
Article 59 All shareholders recorded in the register of shareholders on the equity
registration date or their proxies shall have the right to attend the shareholders’ meeting
and exercise their voting rights in accordance with the relevant laws, rules and these
Articles of Association.
The interval between the equity registration date and the date of meeting shall not be
more than seven working days. The equity registration date shall not be changed once
it is determined.
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Article 60 Where the individual shareholders personally attend the shareholders’
meeting, they shall present their identification cards or other valid certificates which
verify their identities, and their stock account cards; where the individual shareholders
entrust their proxies to attend the meeting on their behalf, said proxies shall present
their valid identity certificates and the power of attorney from the shareholder.
In the case of legal person shareholders, their legal representatives or proxies entrusted
by such legal representatives shall attend the meeting. The legal representatives, if
attending the meeting, shall present their identification cards and valid certificates
which verify their qualifications as legal representative; where proxies are entrusted by
such legal representatives to attend the meeting, such proxies shall present their
identification cards, and the written power of attorney as issued legally by the legal
representatives of the legal person shareholders.
Article 61 The power of attorney, as issued by the shareholders, shall indicate that
proxies are entrusted to attend the shareholders’ meeting and shall contain the following
items:
(1) the name of each proxy;
(2) whether each proxy has voting rights;
(3) indication on affirmative, negative or abstention vote upon every matter which is
listed in the agenda of and shall be examined and deliberated at the shareholders’
meeting;
(4) issuing date and term of validity of the power of attorney;
(5) signature (or seal) of the principal. Where the principal is a legal person shareholder,
the official seal of the legal person shareholder shall be affixed.
Article 62 The power of attorney shall clarify whether the shareholders' proxies
may act at their discretion without specific instructions from the shareholders.
Article 63 Where the power of attorney granted for voting by proxy is signed by
a person entrusted by the principal, the authorization letter signed by authorization or
other authorization documents shall be notarized. The notarized authorization letter or
other authorization documents, as well as the power of attorney granted for voting by
proxy shall be kept at the domicile of the Company or at any other place prescribed in
the Notice for convening the shareholders’ meeting.
Where the principal is the legal person, it shall be represented at the shareholders’
meeting of the Company by its legal representative, or any other person as authorized
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by the board of directors or any other decision-making organ.
Article 64 The register of attendants of the shareholders’ meeting shall be
prepared by the Company. The register shall expressly record such matters as the name
of the attendant (or of the unit thereof), the identification card number, domicile address
of the attendant, the number of voting shares held or represented by the attendant, and
the name of the principal (or the unit thereof).
Article 65 The convener and the lawyer engaged by the Company shall, in
accordance with the register of shareholders provided by Shenzhen Branch of China
Securities Depository and Clearing Corporation Limited, jointly verify the legality of
the qualification of each shareholder, and register the full name of and number of voting
shares held by each shareholder. Prior to the announcement by the presider of the total
number of shareholders who attend the on-site shareholders’ meeting and the total
number of the voting shares held by the attending shareholders and proxies, the
registration shall be ceased.
Article 66 At the time of the shareholders’ meeting, all the directors, supervisors
and the secretary of the board of directors of the Company shall attend the meeting, and
President and CEO and other senior executives shall sit on the meeting.
Article 67 The shareholders’ meeting shall be presided over by the chairman of
the board of directors. Where the chairman is unable to or fails to perform his duties,
the shareholders’ meeting shall be presided over by a director jointly elected by the
majority of all the directors.
If independently convened by the board of supervisors, the shareholders’ meeting shall
be presided over by the chairman of the board of supervisors. Where the chairman of
the board of supervisors is unable to or fails to perform his duties, the shareholders’
meeting shall be presided over by a supervisor jointly elected by the majority of all the
supervisors.
Shareholders’ meetings independently convened by the shareholders shall be presided
over by a representative elected by the convener.
Where the presider violates the procedural rules while the shareholders’ meeting is
being held so that the meeting is unable to continue, a presider may, with the approval
by the majority of voting rights represented by the shareholders present at the
shareholders’ meeting, be elected by the shareholders’ meeting to preside the meeting.
Article 68 The Company shall formulate the procedural rules of the shareholders’
meeting, which shall prescribe the detailed holding and voting procedures of said
meeting, including the notice, registration, examination and deliberation of proposals,
ballot, vote calculation, announcement of voting results, formulation of meeting
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resolutions, meeting minutes and signature, announcement and other items, as well as
the principles by which the shareholders’ meeting authorizes the board of directors. The
authorized content shall be definite and specific. The procedural rules of the
shareholders’ meeting shall be attached as an appendix to the Company's Articles of
Association and shall be drafted by the board of directors and approved by the
shareholders’ meeting.
Article 69 The board of directors and the board of supervisors shall, at the annual
shareholders’ meeting, report their work for the last year to such meeting. Each
independent director shall also report his work.
Article 70 Directors, supervisors, and senior executives shall at the shareholders’
meeting give explanations and clarifications on the inquiries and recommendations
raised by the shareholders.
Article 71 The presider of the shareholders’ meeting shall, prior to vote, announce
the total number of attending shareholders and proxies, and the total voting shares held
by them. The total number of attending shareholders and proxies, and the total voting
shares held by them shall be subject to registration before the shareholders’ meeting.
Article 72 The shareholders’ meeting shall have meeting minutes and these shall
be the responsibility of the secretary of the board of directors. The meeting minutes
shall record the following items:
(1) time, place, agenda, and name of the convener of the meeting;
(2) name of the presider and each of the directors, supervisors, President and CEO and
any other senior executive who attend the meeting with voting right or sit on the
meeting;
(3) total number of voting shares held by shareholders (including their proxies) by the
domestic shares and shareholders (including their proxies) of domestically listed
foreign-funded shares, and proportion of such total number in the Company's shares;
(4) examination and deliberation procedure, main speech points and voting result of
each proposal by shareholders of the domestic shares and shareholders of
domestically listed foreign-funded shares;
(5) inquiries or recommendations of the shareholders and the relevant replies or
explanations thereto;
(6) name of lawyers, vote counters and vote supervisor; and
(7) other items shall be recorded in the meeting minutes in accordance with the
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provisions hereof.
Article 73 The convener shall ensure the authenticity, accuracy and completeness
of the minutes of the shareholders’ meeting. The attending directors, supervisors,
secretary of the board of directors, convener or representative thereof, and the meeting
presider shall sign the meeting minutes. Meeting minutes shall, together with the
register of the present shareholders and the powers of attorney for attendance by proxy,
and valid materials concerning votes through the internet and other means shall be kept
together for a period of no less than ten years.
Article 74 The convener shall ensure the continuity of the shareholders’ meeting
until the final resolutions are formed. Where such specific reasons as force majeure or
other special causes result in the suspension of the shareholders’ meeting or the failure
to adopt a resolution at the meeting, the necessary measures shall be taken to resume
the shareholders’ meeting as soon as possible or to directly close the meeting and make
an immediate announcement. At the same time the convener shall report to the CSRC
office in the place where the Company is located and the stock exchange.
Section 6 Vote and Resolution of Shareholders’ meetings
Article 75 There shall be two types of resolutions of the shareholders’ meeting:
ordinary resolution and special resolution.
Ordinary resolutions made by the shareholders’ meeting shall require more than half of
the voting rights represented by the attending shareholders (including proxies thereof).
Special resolutions made by the shareholders’ meeting shall require at least 2/3 of the
voting rights represented by the attending shareholders (including proxies).
Article 76 The following matters shall require the approval of the shareholders’
meeting by ordinary resolution:
(1) work report of the board of directors and the board of supervisors
(2) profit distribution plan and plan to recover Company losses as drafted by the board
of directors;
(3) appointment and dismissal of members of the board of directors and the board of
supervisors, remunerations to them and the method for payment of such
remunerations;
(4) annual budget plan and final calculation plan of the Company;
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(5) annual report of the Company; and
(6) other matters which shall be passed by special resolution in accordance with the
provisions of the laws, administrative regulations or these Articles of Association.
Article 77 The following matters shall be passed at the shareholders’ meeting by
special resolution:
(1) increase or decrease in the registered capital of the Company;
(2) spin-off, split, merger/consolidation, dissolution and liquidation of the Company;
(3) amendment to these Articles of Association;
(4) where, within the period of one year, purchases or sales by the Company or the
amount of the guarantee provided by the Company exceeds 30% of the latest
audited total assets of the Company;
(5) stock incentive plan; and
(6) other matters which are prescribed in the provisions of the laws, administrative
regulations or these Articles of Association, as well as the matters which are deemed,
if passed by means of ordinary resolution by the shareholders’ meeting, that they
may have significant potential influences upon the Company and shall be passed by
special resolution.
Article 78 Shareholders (including proxies thereof) shall exercise their voting
rights as represented by the number of voting shares held by them, and each share shall
have one voting right.
The votes casted by minority investors shall be separately counted when material
matters affecting the interests of minority investors are being examined and deliberated
at the shareholders’ meeting. The results of the separate vote-counting shall be publicly
disclosed in a timely manner.
The shares held by the Company shall have no voting rights in themselves and shall not
be calculated into the total number of voting shares held by the attending shareholders.
Where the shareholder violates the provisions of Paragraphs 1 and 2 of Article 63 of
the Securities Law in purchasing voting shares, the voting right of the part that has
exceeded the prescribed proportion shall not be exercised within 36 months after the
purchase, and such part of shares will not be included in the total number of voting
shares held by the attending shareholders.
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The board of directors, independent directors, shareholders holding more than 1% of
the voting shares or the investor protection institutions statutorily set up may publicly
collect the voting rights of shareholders.
Article 79 The board of directors shall decide whether the relevant items proposed
to be submitted to the shareholders’ meeting for examination and deliberation constitute
affiliated transaction according to the laws, rules and the Listing Rules of Shenzhen
Stock Exchange. Where the board of directors decide that the items proposed to be
submitted to the shareholders’ meeting for examination and deliberation constitute
affiliated transaction, it shall inform the affiliated shareholders in writing.
The board of directors shall complete the aforesaid work before sending the notice of
the shareholders’ meeting, and disclose the details of the affiliated party in connection
with the item proposed to be submitted to the shareholders’ meeting for examination
and deliberation.
When the shareholders’ meeting examines and deliberates affiliated transactions, the
affiliated shareholders shall submit the application to refrain from voting upon such
affiliated transactions, and other parties shall have the right to require such shareholders
to refrain from voting. The affiliated shareholders may explain and clarify the affiliated
transaction concerning themselves and whether such transaction is fair and legal and
reason thereof to the shareholders’ meeting, but such shareholders shall not have right
to vote with regard to this affiliated transaction and the number of voting rights
represented by them shall not be calculated in the total number of valid votes; the
announcement of the shareholders’ meeting shall fully disclose the votes of the non-
affiliated shareholders.
Article 80 Except for under unusual circumstances such as crisis and otherwise,
the Company shall not sign a contract with any person other than the directors, President
and CEO and senior executives, which specifies the entrustment by the Company of the
management of all or important businesses to such person.
Article 81 The nomination and election of directors and supervisors.
(I) The methods and procedures of nomination and election of directors and
supervisors:
The incumbent board of directors and board of supervisors and shareholders which
meet certain conditions may nominate candidates of directors and supervisors in
accordance with the provisions in laws, administrative regulations and these Articles of
Association.
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1. The Board of Directors of the Company or the shareholders singly or jointly holding
more than 3% of the shares of the Company may nominate candidates to serve as
non-independent directors.
2. The Board of Supervisors of the Company or the shareholders singly or jointly
holding more than 3% of the shares of the Company may nominate candidates to
serve as supervisors who are non-representatives of the employees.
3. The Board of Directors of the Company or the shareholders singly or jointly holding
more than 1% of the shares of the Company may nominate candidates to serve as
independent directors. An investor protection institution established in accordance
with the laws may publicly request shareholders to entrust it to exercise the right to
nominate independent directors on their behalf. The above-mentioned nominees
shall not nominate individuals with interests or other closely related individuals
who may affect independent performance as independent director candidates.
The nominator of an independent director shall nominate the nominee with such
nominee’s prior consent. The nominator shall adequately understand the profession,
academic qualifications, professional titles, detailed work experience, all part-time jobs
of the nominee and whether the nominee has any negative record of material dishonesty,
and express his opinion on the independence and other qualifications of the nominee’s
serving as an independent director, and the nominee shall make a public statement on
his independence and other qualifications serving as an independent director. Before
the convening of the shareholders’ meeting relating to the election of the independent
director, the board of directors shall announce said content according to relevant
regulations.
4. In addition to other items provided in this article, the board of directors shall
announce the resume and basic information of each candidate director and supervisor
to the shareholders.
(II) The method and procedure to vote upon the election of directors and supervisors
When the shareholders’ meeting votes upon the election of directors and supervisors in
accordance with these Articles of Association or the resolution adopted by the
shareholders’ meeting, the cumulative voting system may be used.
The "cumulative voting" stated in the preceding paragraph shall mean when the
shareholders’ meeting is electing directors or supervisors, each share shall have the
same number of voting rights as the number of candidate directors or supervisors who
are up for election, and the voting rights of all the shareholders may be exercised in a
centralized manner, or distributed to two or more candidate directors with all votes, and
the candidate who obtained more votes shall be elected.
1. The specific voting method to vote upon the election of directors shall be:
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(1) The voting upon the election of independent directors and common directors shall
be separated. The specific method is:
When voting upon the election of independent directors, the number of voting rights
of each shareholder shall be the product of the shares he held multiplies the number
of independent directors he is entitled to vote, and such numbers of voting right
shall only be voted to independent directors.
When voting upon the election of common directors, the number of voting rights of
each shareholder shall be the product of the shares he held multiplies the number of
common directors he is entitled to vote, and such numbers of voting right shall only
be voted to common directors.
(2) When filling out the ballot, a shareholder may distribute to one candidate directors
with all voting power he held, or distributed to several candidate directors and
indicate the voting power distributed to each candidate thereafter. If a shareholder
specifically disapproves any one or more candidates and vote for others, the name
of the person being voted shall be filled in and indicating with the voting power
distributed to such candidate thereafter.
(3) Where the total number of voting power on a vote exceeds the legitimate number
of voting power of a shareholder, such vote shall be deemed invalid.
(4) Where the total number of voting power on a vote is no more than the legitimate
number of voting power of a shareholder, such vote shall be deemed valid.
(5) After the voting, the votes shall be counted and the votes obtained by each candidate
shall be announced, and the directors elected shall be determined based upon the
number of votes obtained by candidate directors.
(6) The principle of election of directors: the final directors elected shall be determined
based upon the number of votes obtained by candidate directors, but the lowest
votes obtained by each director elected shall be more than half of the voting power
of the shareholders attend the shareholders’ meeting (including proxies thereof).
(7) Where the number of candidate directors is more than the number of candidate
directors to be elected, the director elected shall be determined according to the
votes obtained by them in descending order. However, the number of voting rights
of a director elected shall meet the requirement as set forth in Item (6) hereof.
(8) If the number of candidate directors obtained the same votes exceed such kind of
directors to be elected, the said candidate directors shall be voted again according
to the procedures set forth in this article until the director is elected.
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(9) If a proxy vote fails to elect required number of a kind of directors required
according to Articles of Association, the candidate directors with inadequate
amount of votes shall be voted again and if the number of directors elected still fails
to meet the requirement, then it shall be voted in next shareholders’ meeting.
(10) Before the shareholders voted upon the election of directors, the board of directors
shall be responsible in construing the specific method of proxy vote set forth in
these Articles of Association and ensure the shareholders to execute their voting
rights correctly.
2. The election of supervisors of the shareholders’ meeting of the Company shall be
executed in accordance with the method of voting upon the election of directors set
forth hereof.
Article 82 In addition to the cumulative voting, the shareholders’ meeting may
take a vote on all the proposals item by item. Where different proposals are submitted
for the same matter, votes shall be cast in the sequence that such proposals are submitted.
The shareholders’ meeting shall not postpone or refuse voting upon the said proposals
unless the meeting is suspended or they are unable to adopt a resolution as a result of
particular reasons such as force majeure and otherwise.
Article 83 The shareholders’ meeting, when examining and deliberating the
proposals, shall not amend them, otherwise, the relevant amendment shall be deemed
as a new proposal which shall not be voted on at the same shareholders’ meeting.
Article 84 Each voting right shall choose only one of such means including onsite,
through the internet or otherwise. The first voting result prevails if repeated votes arise
by the same voting right.
Article 85 Votes at the shareholders’ meeting shall be by means of open ballot.
Article 86 Prior to vote on proposals at the shareholders’ meeting, two
shareholders shall be elected by the shareholders’ meeting to participate in the vote
calculation and supervision. If shareholders have any relation with the matters to be
examined and deliberated on, the concerned shareholders and proxies thereof shall not
take part in the vote calculation and supervision.
When the shareholders’ meeting is voting on proposals, the lawyers, representatives of
shareholders and supervisors shall be jointly responsible for the vote calculation and
supervision thereof and for the announcement of the voting results which shall be
recorded into the minutes of the meeting.
Shareholders of Company or their proxies who cast votes via internet or through any
27
other means shall have the right to examine their voting results by accessing to the
corresponding voting system.
Article 87 The onsite shareholders’ meeting shall not be terminated earlier than
the shareholders’ meeting held through the internet or by any other means. The presider
of the onsite shareholders’ meeting shall announce the votes and voting results of each
proposal and announce if the proposals have been passed according to the voting results.
Prior to the formal announcement of the voting results, the companies, vote counters,
vote supervisors, major shareholders and the internet service providers and other related
parties involved in the shareholders' meeting held onsite, through the internet or by any
other means shall bear obligation of confidential on the voting results.
Article 88 The attending shareholders shall give their opinions on the proposals
submitted for vote, being: affirmative, negative or abstention vote, except that a
securities registration and settlement institution serving as the nominal holder of the
stocks under Inter-connected Mechanism for Trading on Stock Markets in the Mainland
and Hong Kong make declaration according to the intention of the actual holders.
The blank, falsely-filled and unreadable votes as well as votes that are not made shall
be deemed as abstention, and the voting results represented by the shares of the
abstention voter shall be filled with "abstention".
Article 89 Where the presider has any doubt about the voting results, he may
organize to have the number of votes counted; where the presider fails to do so and the
attending shareholders or the proxies thereof challenge the voting results announced by
the presider, they are entitled to require the counting of votes immediately upon the
announcement of the voting results and the presider shall organize the vote calculation
without delay.
Article 90 The resolutions of the shareholders’ meeting shall be announced
promptly and such announcement shall indicate the number of shareholders of domestic
shares and foreign-funded shares which attend the meeting, the number of voting shares
held by them, the proportions of their voting shares in the total voting shares of the
Company, the voting methods, the vote results of each proposal and the particulars of
each resolution adopted.
Article 91 Where the proposals fail to be passed by the shareholders’ meeting or
the previous resolutions of the last shareholders’ meeting are altered at the current
shareholders’ meeting, special indications shall be made in the announcement of the
said meeting.
Article 92 Where the shareholders’ meeting passes a proposal concerning election
of directors and supervisors, the starting time of their assumption of office shall be the
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date of resolution of the shareholders’ meeting is made, and in the case of a supervisor
as a representative of the employees shall be the date of resolution of the employee
representatives' meeting is made.
Article 93 Where the shareholders’ meeting passes a proposal regarding the
distribution of cash dividends, share granting or conversion of common reserve fund
into share capital, the Company shall implement the detailed plan for such proposals
within two months from the closing of the shareholders’ meeting.
Chapter 5 Board of Directors
Section 1 Directors
Article 94 The directors of the Company shall be natural persons, they shall not
act in the capacity of director under any of the following circumstances:
(1) having no civil capacity or limited civil capacity;
(2) having been sentenced to criminal penalties due to committed offences of
corruption, bribery, infringement of property, misappropriation of property or
sabotaging the social economic order, where less than five years have elapsed since
the date of completion of said sentence; having been deprived of their political
rights due to criminal offences, where less than five years have elapsed since the
date of the completion of implementation of this deprivation;
(3) having served in the capacity of director, factory chief or manager of a Company or
enterprise which has gone into bankruptcy or liquidation proceeding, and being
personally responsible for such bankruptcy, where less than three years have
elapsed since the closing of the said bankruptcy or liquidation;
(4) having served as the legal representative of a Company or enterprise whose business
license has been revoked or which has been order to close down due to the violation
of law, and being personally responsible for such revocation and closing down,
where less than three years have elapsed since the said revocation;
(5) being in default of personal debts in a significant amount at the time of their
maturity;
(6) having been prohibited from accessing the securities market by the CSRC, where
the specified prohibition period has not yet finished;
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(7) having been announced by the Stock Exchange that it is not appropriate for him to
be the director of a listed Company;
(8) having been punished by the administrative sanctions of the CSRC in the past 36
months or having been publicly denounced by the Stock Exchange in the past three
years;
(9) having been suspected of committing a crime and a case has been put on file by the
judicial organs to investigate or suspected of violating the law or rules and a case
has been put on file by the CSRC, where no clear conclusion has been made;
(10) other content as prescribed in the laws, administrative regulations or regulations of
ministries and commissions.
In the case of election or appointment of directors in violation of this Article, such
election, appointment or employment shall be null and void. Where the circumstances
as prescribed in this Article take place during the term of any director, such director
shall be dismissed by the Company.
Article 95 Directors shall be elected or replaced by the shareholders' meeting and
may be removed by the shareholders' meeting before the expiration of their term of
office. The term of office of the directors shall be three years. The directors may serve
consecutive terms if reelected upon expiration of their term of office. The term of office
of each director shall commence as of his assumption of office until the expiration of
the current board of directors. Where the new directors fail to be promptly elected upon
the expiration of the term of office, then before the newly elected directors assume
office, the original directors shall retain their directorship in accordance with the laws,
administrative regulations, rule, and these Articles of Association.
Directors can serve concurrently as President and CEO or other senior executives,
however, the directors who concurrently serve as President and CEO or other senior
executives and directors who are employee representatives (if any) shall not exceed half
of all the directors of the Company.
Article 96 The directors shall abide by laws, administrative regulations, and these
Articles of Association and be faithful to the Company as follows:
(1) not abuse their functions and powers to accept bribery or other illegal income and
not misappropriate the Company's assets;
(2) not embezzle the Company's funds;
(3) not open accounts in their own name or in the names of others, for depositing the
funds or assets of the Company;
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(4) not lend the Company's funds to others or provide guarantees for others with the
Company’s assets in violation of the hereof and without the approval of the
shareholders’ meeting or the board of directors;
(5) not enter into any contract or transaction with the Company in violation of these
Articles of Association and without the approval of the shareholders’ meeting;
(6) without the approval of the shareholders' meeting, not abuse their powers and
functions to seek business opportunities for themselves or others as should belong
to the Company, nor operate for themselves or others businesses similar to those of
the Company;
(7) not accept commission derived from transactions of the Company, as personal gains;
(8) not reveal the Company's secrets without authorization;
(9) not abuse affiliated relationships to impair the interests of the Company; and
(10) other faithful obligations as prescribed in the laws, administrative regulations,
regulations of ministries and commissions and these Articles of Association.
Any income of the directors arising from their acts aforesaid mentioned shall be
confiscated by the Company; where the directors cause losses to the Company, they
shall bear compensation liabilities.
Article 97 The directors shall abide by the laws, administrative regulations and
these Articles of Association, and shall act with due diligence towards the Company as
follows:
(1) prudently, earnestly and diligently exercising the rights conferred by the Company
so as to ensure the compliance of the Company's business acts with the requirements
of the laws, administrative regulations and the various State economic policies and
that business activities shall not exceed the business scope mentioned in the
business license;
(2) treating all the shareholders fairly;
(3) promptly gaining understanding of the business, operation and management
conditions of the Company;
(4) signing written confirmation opinion to the Company's periodic report and ensuring
that the information disclosed by the Company is true, accurate and complete;
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(5) providing the relevant information and materials to the board of supervisors
faithfully, and not impeding the board of supervisors or supervisors in exercising
their functions and powers; and
(6) other obligations of diligence as prescribed in the relevant laws, administrative
regulations, regulations of ministries and commissions, and these Articles of
Association.
Article 98 Where the directors fail to attend in person two consecutive meetings
of the board of directors and further fail to entrust other directors to attend the meeting,
they shall be deemed incapable of performing their duties and the board of directors
shall propose a shareholders' meeting to replace such directors.
Article 99 The directors may submit the resignation in advance of expiration of
the term of office. The directors may submit their resignation report in writing to the
board of directors to resign and the board of directors shall disclose the relevant
information within two days thereafter.
Where the total number of members of the board of directors is lower than the minimum
number of members required by law due to the resignation of any director, then before
the newly elected director assumes office, the former director shall still retain their
directorship in accordance with the relevant laws, administrative regulations,
regulations of ministries and commissions and these Articles of Association.
The resignation of each director shall, except for the circumstances prescribed in the
preceding paragraph, come into effect after the resignation report is submitted to the
board of directors.
Article 100 Where the director resigns comes into force or his term of office
expires, his obligations to the Company and shareholders shall not be discharged before
the resignation report comes into effect, nor be discharged within 6 months following
the effectiveness of the resignation report or expiration of term of office, and his
obligations to the trade secrets of the Company shall survive his term of office, till the
trade secrets becomes public information. The duration of his other obligations shall be
determined according to the principle of fairness, depending on the intervals between
the occurrence of the event and his resignation, and the situations and conditions under
which the director terminates his relationship with the Company.
Article 101 Without the legal authorization by these Articles of Association or the
board of directors, no director shall represent the Company or the board of directors to
act in his own name. If any director acts in his own name and further if in the reasonable
opinion of a third party, such acts represent those of the Company or the board of
directors, the director shall declare his standpoint and identity at first.
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Article 102 Where the law, administrative regulations, regulations of ministries
and commissions or these Articles of Association are violated by the directors in
performing duties for the Company, thus causing losses to the Company, the directors
shall be liable for compensation.
Article 103 Independent directors shall act in accordance with the relevant laws,
administrative regulations, and relevant rules of the CSRC and the stock exchange
concerned.
The Company should establish the independent director policy. The independent
director policy should comply with laws, administrative regulations, the provisions of
the CSRC, and the business rules of the Shenzhen Stock Exchange. The independent
director policy should be drafted by the board of directors and approved by the
shareholders' meeting. The Company should provide necessary guarantees for
independent directors to perform their duties in accordance with the law.
Section 2 Board of Directors
Article 104 The board of directors established by the Company shall be
responsible to the shareholders' meeting.
Article 105 The board of directors shall be composed of five [5] to seven [7]
directors, with three [3] independent directors therein. The board of directors shall have
one board chairman. The chairman of the Company shall be elected by more than half
of all the directors. The Company shall not have any director as the representatives of
the staff and workers.
Article 106 The board of directors shall exercise the following functions and
powers:
(1) convening the shareholders' meeting and reporting its work to the shareholders'
meeting;
(2) implementing the resolutions of the shareholders’ meeting;
(3) deciding on the business plan and investment scheme of the Company;
(4) formulating the annual financial budget and final calculation plan of the Company;
(5) formulating profit allocation plan and plan to recover losses, of the Company;
(6) formulating plans of the Company regarding the increase or decrease in the
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registered capital, the issuance of bonds or other securities and the listing of the
Company;
(7) drawing up Company plans concerning major acquisitions, the acquisition of
Company stocks or merger/consolidation, spin-off, dissolution and alteration in
corporate form;
(8) within the scope of authorization granted by the shareholders' meeting, deciding on
such matters as external investment, acquisition and sale of assets, mortgage of
assets, external guarantee, entrusted management of wealth, affiliated transactions
and external donations;
(9) deciding on the establishment of the internal management organizations of the
Company;
(10) deciding on such matters as appointing or dismissing President & Chief Executive
Officer and the secretary of the board of directors of the Company, as well as their
remuneration and reward/punishment; according to nominations by President &
Chief Executive Officer, deciding on appointing or dismissing senior executives
including Chief Financial Officer, and deciding on the remuneration, reward and
punishment particulars of the preceding persons;
(11) formulating the basic management system of the Company;
(12) formulating the plan for amendment to these Articles of Association;
(13) managing the information disclosure of the Company;
(14) proposing to the shareholders' meeting the appointment or replacement of the
accounting firm which renders audit service to the Company;
(15) hearing the President and CEO’s work report and examining the work of the
President and CEO;
(16) other functions and powers conferred by the laws, administrative regulations,
regulations of ministries and commissions, and these Articles of Association.
The board of directors of the Company shall establish an audit committee, and establish
the relevant specialized committees such as strategies, nomination, remuneration and
appraisal, etc. where necessary. The specialized committees shall be accountable to the
board of directors, perform duties pursuant to these Articles of Association and the
authorization of the board of directors, and submit proposals to the board of directors
for deliberation and decision. The audit committee is responsible for reviewing the
Company's financial information and its disclosure, supervising and evaluating internal
34
and external audit work and internal control. The strategy committee is responsible for
formulating the Company's long-term development strategy, conducting research on
material decisions, and providing recommendations to the board of directors. The
nomination committee is responsible for drafting the selection criteria and procedures
for directors and senior executives, and for selecting and reviewing the candidates and
their qualifications for appointment. The remuneration and appraisal committee is
responsible for formulating assessment standards for directors and senior executives,
conducting assessments, and formulating and reviewing remuneration policies and
plans for directors and senior executives. All members of the specialized committees
shall be directors. The independent directors shall constitute the majority of the audit
committee, the nomination committee and the remuneration and appraisal committee
and act as the convener, and the convener of the audit committee shall be an accounting
professional. The board of directors shall be responsible for formulation of working
procedures for the specialized committees and standardize the operations of the
specialized committees.
Article 107 The Board of Directors shall hear the opinions of the Party Committee
of the Company before making decisions on the appointment and removal of important
personnel and material business and management matters of the Company.
Article 108 The board of directors of the Company shall explain to the
shareholders' meeting any non-standard audit opinions on the Company's financial
statements issued by the certified public accountants.
Article 109 The board of directors shall set forth the procedural rules of the board
of directors to ensure its implementation of the resolutions adopted by the shareholders'
meeting, and to improve the work efficiency and guarantee scientific decision making.
Article 110 The board of directors shall have powers regarding the transactions
which meet one of the following criteria:
(1) The total amount of assets involved in the transaction exceeds 20% of the latest
audited total assets of the Company. If the assets involved in the transaction have
book value and appraisal value concurrently, the higher value shall be used for
calculation;
(2) The net assets involved in the target of the transaction (i.e. equity transaction)
exceed 20% of the latest audited net assets of the Company and the absolute amount
is more than RMB 20 million. If the assets involved in the transaction have book
value and appraisal value concurrently, the higher value shall be used for calculation;
(3) The revenue of the target of the transaction (i.e. equity interests) in the latest year
exceeds 20% of the latest audited revenue of the Company, and the absolute amount
is more than RMB 20 million;
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(4) The net profit of the target of the transaction (i.e. equity interests) in the latest year
exceeds 20% of the latest audited net profit of the Company, and the absolute
amount is more than RMB 2 million;
(5) The amount of the transaction (including indebtedness and expenses) exceeds 20%
of the latest audited net assets of the Company, and the absolute amount is more
than RMB 20 million;
(6) The profit of the transaction exceeds 20% of the latest audited net profit of the
Company, and the absolute amount is more than RMB 2 million;
(7) External guarantee: any guarantee other than the guarantee stipulated under Article
41;
(8) Affiliated transaction: the affiliated transaction between the Company and affiliated
natural person exceeds RMB 300,000; the affiliated transaction between the
Company and affiliated legal person (or other organizations) exceeds RMB 3
million and exceeds 0.5% of the latest audited net assets of the Company;
(9) Securities investment: the total amount exceeds 10% of the latest audited net assets
of the Company, and the absolute amount being more than RMB 10 million.
Securities investment foresaid includes placement or subscription of new shares,
securities repurchase, stock investment, bond investment, entrusted financial
management (including bank financial products, trust products) and other
investment behavior identified by the Shenzhen Stock Exchange.
If any amount involved in this Article is negative amount, the absolute amount shall be
used for calculation purpose.
The board of directors shall perform the duty to disclose as required by the Listing
Rules of Shenzhen Stock Exchange in executing the power set forth aforesaid.
The board of directors shall establish strict reviewing and decision-making procedures;
with regard to the major investment projects, the functional department of the Company
or branch manager shall conduct feasibility analysis and demonstration, and the
Company shall organize experts and professionals including lawyers and accountants,
etc. to review and issue professional opinions from the financial and legal perspectives,
and such projects shall be submitted to the shareholders meeting for discussion after
review and approval by the board of directors and shall be executed after the
shareholders meeting approved such transaction. The shareholders meeting shall have
powers regarding transactions which meet one of the following criteria:
(1) The total amount of assets involved in the transaction exceeds 50% of the latest
36
audited total assets of the Company. If the assets involved in the transaction have book
value and appraisal value concurrently, the higher value shall be used for calculation;
(2) The net assets involved in the target of the transaction (i.e. equity transaction)
exceed 50% of the latest audited net assets of the Company and the absolute amount is
more than RMB 50 million. If the assets involved in the transaction have book value
and appraisal value concurrently, the higher value shall be used for calculation;
(3) The revenue of the target of the transaction (i.e. equity interests) in the latest
year exceeds 50% of the latest audited revenue of the Company, and the absolute
amount is more than RMB 50 million;
(4) The net profit of the target of the transaction (i.e. equity interests) in the latest
year exceeds 50% of the latest audited net profit of the Company, and the absolute
amount is more than RMB 5 million;
(5) The amount of the transaction (including indebtedness and expenses)
exceeds 50% of the latest audited net assets of the Company, and the absolute amount
is more than RMB 50 million;
(6) The profit of the transaction exceeds 50% of the latest audited net profit of the
Company, and the absolute amount is more than RMB 5 million;
(7) Affiliated transaction: the affiliated transaction (except for the transactions that
the Company receives cash as gift and the Company provides guarantee) between the
Company and affiliated person exceeds RMB 30 million and exceeds 5% of the latest
audited net assets of the Company;
(8) Securities investment: the total amount exceeds 50% of the latest audited net
assets of the Company, and the absolute amount being more than RMB 50 million.
Regarding to the purchase or sale of assets transaction, the Company shall use the total
amount of the assets or the amount of the transaction, whichever is higher, as the
calculation criteria and the amount shall be cumulative in the twelve consecutive
months according to the type of the transaction. If the amount reaches 30% of the latest
audited total assets, the transaction shall be submitted to the shareholders’ meeting for
consideration and shall be adopted by more than two thirds of the voting rights held by
the shareholders present at the meeting.
If any amount involved in this Article is negative amount, the absolute amount shall be
used for calculation purpose.
The term "transaction" as mentioned in this Article includes the following: (1) the
purchase or sale of assets (excluding the purchase of raw materials, fuel and power, and
37
the sale of products, commodities and other assets related to daily operations, but the
purchase and sale of such assets involved in the assets swap is still included), (2)
external investment (including entrusted financial management, investment in
subsidiaries, etc.); (3) providing financial support (including entrusted loans, etc.); (4)
providing guarantee(including guarantee for controlled subsidiaries, etc.); (5) renting
or leasing assets ; (6) entrusting others or being entrusted for management of assets or
business; (7) gifting assets or being gifted; (8) claims or debt restructuring; (9)
transferring or acquiring by transfer research and development projects; (10) signing a
license agreement; (11) waiver of rights (including without limitation waiver of
preemptive rights or the privilege to subscribe for capital contributions); (12) other
transactions identified by the Shenzhen Stock Exchange.
The external donation shall comply with the External Donation Management Measures
of ADAMA Ltd.
Article 111 The external guarantee of the Company shall comply with the
following rules:
(1) the Company shall not provide guarantee to any entity that is not a legal person or
an individual;
(2) the Company shall not provide external guarantee without the approval of the board
of directors or the shareholder’s meeting;
(3) the external guarantee which requires the approval of the board of directors shall be
examined and approved by more than 1/2 of all the directors and 2/3 of the directors
who attend the meeting, and the directors shall adopt resolutions on such guarantee;
(4) If the Company provides an external guarantee to the controlling shareholder, actual
controller and their associates, the counter-guarantee from the warrantee shall be
required;
(5) If the Company or its subsidiary provides an external guarantee to a controlled
subsidiary not fully owned by the Company (directly or indirectly), the minority
shareholder of the guaranteed subsidiary shall provide a corresponding guarantee
based on its share percentage in the guaranteed subsidiary.
Article 112 The chairman of the board of directors has the following functions
and powers:
(1) presiding over the shareholders' meeting, and convening and presiding over the
meeting of the board of directors;
(2) supervising and inspecting for the execution of resolutions adopted by the board of
38
directors;
(3) signing the shares, debentures and other marketable securities of the Company;
(4) signing important document of the board of directors;
(5) execute special disposing right in accordance with the laws and the interest of the
Company with regard to the business and affairs of the Company where the force
majeure events including severe natural disasters, etc. happen, and report to the
board of directors and shareholder’s meeting afterwards; and
(6) other power entrusted by the board of directors.
Article 113 Where the chairman of the board of directors is unable to or fails to
perform his duties, a director jointly elected by the majority of all the directors shall
perform his duties.
Article 114 The board of directors shall hold at least two meetings a year which
shall be convened by the chairman of the board of directors. The board of directors shall
notify all directors, supervisors and President and CEO ten days in advance of the
meeting.
Article 115 Shareholders representing more than 1/10 of the voting rights, the
directors accounting for more than 1/3 of all the members of the board of directors,
independent directors, the board of supervisors or the President and CEO may propose
to hold an interim meeting of the board of directors. The chairman of the board shall,
within 10 days after the receipt of the proposal, convene and preside over the meeting
of the board of directors. The Chairman of the board may propose to hold an interim
meeting of the board of directors, at any time, if it deems necessary.
Article 116 The method of giving notice that the board of directors shall hold the
interim meeting thereof: oral or written notice; time of the notice: 2 days before the
meeting.
With the unanimous consent of all the directors, the convening of the interim board
meeting may not be restricted by the aforementioned notice time limit, provided that a
record thereof shall be made in the minutes of the board of directors and signed by all
participating directors.
Article 117 The notice on the meeting of the board of directors shall include the
following:
(1) meeting date and place;
39
(2) time limit of the meeting;
(3) matters for discussion; and
(4) issuing date of the notice.
Article 118 The meeting of the board of directors may not be held unless it is
attended by the majority of all the directors. Any resolution made by the board of
directors shall require the approval of more than half of all the directors.
As to the resolutions of the board of directors, each director shall have one vote.
Article 119 Where directors have affiliated relationship with the enterprises
mentioned in any resolution made by the board of directors, such directors shall neither
vote on the said resolutions nor act as proxies for other directors to exercise their voting
right upon the said resolutions. Such meetings of the board of directors may not be held
unless attended by the majority of all the non- affiliated directors, and resolutions
adopted at such meeting shall be passed by the majority of all the non-affiliated
directors. Where the number of the non-affiliated directors attending the meeting of the
board of directors is less than three, the matters shall be submitted to the shareholders'
meeting for examination and deliberation.
Article 120 Voting method at the meeting of the board of directors: disclosed vote.
The interim meeting of the board of directors, on the precondition of ensuring the full
expression by directors of their opinions, may adopt resolutions by communication and
require signatures of the attending directors.
Article 121 The meeting of the board of directors shall require the attendance of
the directors in person; where the directors are with good reason unable to attend the
meeting, they may in writing entrust other directors to do so. The written power of
attorney shall indicate the name of each proxy, entrusted matters, scope of authorization
and validity, and shall be signed by or marked with the seal of each principal, but
independent director shall not be entrusted by non-independent director, non-
independent director shall also not be entrusted by independent director.
Directors who attend the meeting of the board of directors as proxies shall exercise their
rights in capacity of director within the scope of authorization. Where the directors fail
to attend the meeting of the board of directors and further fail to entrust representatives
to do so on their behalf, it shall be deemed that they have waived their voting rights at
such meeting.
Article 122 The board of directors shall prepare minutes of its meeting in respect
to matters to be examined and deliberated at such meeting, and the attending directors
40
shall sign such minutes.
The minutes of the meeting of the board of directors shall be kept on file at the Company
for a period of no less than 10 years.
Article 123 The minutes of the meeting of the board of directors shall include the
following:
(1) date, place of meeting and name of the convener and presider;
(2) names of the attending directors and of the directors (proxies thereof) who are
entrusted by others to attend the meeting;
(3) meeting agenda;
(4) main points of speeches by directors; and
(5) methods and results for votes upon each matter to be examined and deliberated (the
voting results shall set forth the number of affirmative, negative or abstention votes).
Chapter 6 Party Committee
Article 124 The Company shall establish the Party Committee. The Party
Committee shall have one Secretary, one Vice Secretary and several committee
members. The Chairman of the Board of Directors and the Secretary of the Party
Committee shall be the same person in principle, there shall be a full-time Vice
Secretary in charge of the Party work of the Company (if needed). The qualified
member of the Party Committee may act a member of the Board of Directors, Board of
Supervisors, Management though legal procedure, and the qualified Party member of
the Board of Directors, Board of Supervisors, and Management may act as a member
of the Party committee according to relevant rules and procedures, Further, a Discipline
Inspection Committee shall be established.
Article 125 The Party Committee of the Company shall perform its duty
according to the Charter of the CPC and the Work Regulations of the CPC, Regulation
on the work at primary-level Party organizations of State-owned enterprises (for Trial
Implementation) and other Party regulations.
(1) Ensure and supervise the implementation of the policies of the Party and Nation at
the Company, implement the strategic decision of the CPC Central Committee, the
State Council, and the work arrangement of the Party Committee of the State-owned
Assets Supervision and Administration Commission (“SASAC”), and the higher
Party organization.
41
(2) Insist the principle that the Party shall manage the officers, and that the Board of
Directors shall have the right to select the managers according to the law, and that
the managers shall have the right to select employees according to the law to be
integrated. The Party Committee shall consider the candidates nominated by the
Board of Directors or President and CEO and raise opinions, or recommend
candidates to the Board of Directors or President and CEO. The Party Committee
shall examine the candidates with the Board of Directors and raise opinions after
collective examination.
(3) Research and discuss the stability of development and reform, material
management issue, employee benefits of the Company, and raises opinions and
recommendations.
(4) Undertake the main responsibility of implementing the principle of “Strict
Management of the Party”. Take the lead of the ideological and political work of
the Company, the United Front work, the construction of spiritual civilization, the
construction of company culture and work of the Union, the Communist Youth
League and other organizations. Lead construction of a clean Party and government,
and support the work of Discipline Inspection to perform the duty of oversight.
Article 126 The funds for the work of Party organization shall be included in the
budget of the Company and be disbursed from the management cost of the Company.
Chapter 7 President and CEO and Other Senior Executives
Article 127 The Company has one President and CEO who is subject to
appointment or dismissal by the board of directors.
The Company has Chief Financial Officer who shall be nominated by the President and
CEO and subject to appointment or dismissal by the board of directors.
The President and CEO, Chief Financial Officer and the secretary of board of directors
shall be the senior executives of the Company.
Article 128 Circumstances concerning the disqualification of directors as
prescribed in Article 94 are also applicable to the senior executives. Provisions
concerning the duty of loyalty of directors as prescribed in Article 96 and duty of care
as prescribed in Items (4), (5), (6) of Article 97 are also applicable to the senior
executives.
Article 129 Those persons take administrative posts, except for directors and
supervisors, in the units of the controlling shareholders of the Company, shall not serve
as senior executives of the Company.
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The Company's senior executives are paid only by the Company (and/or its subsidiaries)
and are not paid by the controlling shareholder on behalf of the Company.
Article 130 The term of office of President and CEO shall be three years, and
President and CEO may be reappointed and reelected.
Article 131 The President and CEO shall be responsible to the board of directors,
and exercise the following functions and powers:
(1) presiding over the production, operation and management of the Company and its
subsidiaries, organizing the implementation of the resolutions adopted by the board
of directors and reporting work to the board of directors;
(2) organizing the implementation of annual business plans, debt and investments plan
of the Company;
(3) drafting plans for establishment of the Company's internal management
organizations;
(4) signing documents which shall be signed by the legal representative of the
Company and executing the functions and powers of the legal representative;
(5) drafting the basic management system of the Company;
(6) formulating the specific rules and regulations of the Company;
(7) proposing for the board of directors to appoint or dismiss the Chief Financial Officer
of the Company;
(8) deciding on the appointment or dismissal of other management personnel other than
those who shall be appointed or dismissed by the board of directors;
(9) deciding on the senior executives dispatched by the Company to the controlled
subsidiaries and non-controlled subsidiaries of the Company;
(10) proposing for convening an interim meeting of the board of directors;
(11) advancing proposals to meeting of the board of directors;
(12) approving transactions of the Company that do not meet the criteria for submission
to the board of directors for approval as set out in Article 110 of these Articles of
Association; and
(13) other functions and powers conferred by these Articles of Association or the board
of directors.
43
The President and CEO shall sit on the meeting of the board of directors.
Article 132 The work particulars applicable to the President and CEO shall be
prepared by the President and CEO and may not be implemented unless approved by
the board of directors.
Article 133 The work particulars applicable to the President and CEO shall
include:
(1) conditions, procedures for holding the meeting of the President and CEO and the
people attending such meeting;
(2) respective duties and functions and powers of the President and CEO ;
(3) powers delegated by the board of directors to the President and CEO and the
way to convene the President and CEO meeting ; and
(4) other matters deemed necessary by the board of directors.
Article 134 The President and CEO may resign prior to the expiry of his term of
office. The specific procedures and measures for such resignation shall be set forth in
the labor contract between the President and CEO and the Company.
Article 135 Chief Financial Officer shall assist the President and CEO in his work.
Article 136 The Company shall have a secretary of the board of directors who
shall be responsible for preparing the shareholders' meeting and the meeting of the
board of directors, keeping documents, conducting management of information
regarding shareholders of the Company and dealing with information disclosure matters,
etc. The secretary of the board of directors shall abide by the related provisions of the
laws, administrative regulations, regulations of ministries and commissions and these
Articles of Association.
The work particulars applicable to the secretary of the board of directors shall be
prepared by the Company, which includes the position, main duty and qualification,
functions and powers, supervision, legal liability and resignation of the secretary of the
board of directors. The work particulars applicable to the secretary of the board of
directors shall be approved by the meeting of the board of directors.
Article 137 Where the senior executives violate laws, administrative regulations,
regulations of ministries and commissions or these Articles of Association when
performing their duties, thus causing losses to the Company, they shall be liable for
compensation according and subject to any applicable laws and regulations.
44
Article 138 The senior executives of the Company shall faithfully perform their
duties and act in the best interests of the Company and all shareholders. Where any
senior executive fails to perform his/her duties faithfully or breaches his/her obligation
of good faith, and thereby causes damage to the Company's interests or the shareholders
of public shares, he/she shall be liable for compensation according and subject to any
applicable law.
Chapter 8 Board of Supervisors
Section 1 Supervisors
Article 139 The circumstances mentioned under Article 94 hereunder regarding
the disqualification for directors shall also apply to the supervisors.
The directors, President and CEO and other senior executives shall not concurrently act
as supervisors.
Article 140 Supervisors shall abide by the laws, administrative regulations, and
these Articles of Association and shall assume their obligation to the Company to act
dutifully and diligently, shall not abuse their functions and powers to accept bribery or
other illegal income, nor misappropriate Company assets.
Article 141 The term of office for each supervisor shall be three years. The
supervisors may be reappointed and reelected upon the expiration of their term of office.
Article 142 Where new supervisors fail to be promptly elected upon the expiration
of their term of office, or the resignation of supervisors within their term of office has
resulted in the number of members of the board of supervisors being lower than the
number of members required by law, then the former supervisors shall, before the newly
elected supervisors take office, continue to perform their duties in accordance with the
laws, administrative regulations, rules and these Articles of Association.
Article 143 Supervisors shall ensure the authenticity, accuracy and completeness
of information disclosed by the Company, and shall make a written confirmation
opinion on periodic reports.
Article 144 Supervisors may sit on the meeting of the board of directors and raise
inquiries or recommendations on resolutions made by the board of directors.
Article 145 The supervisors shall not abuse affiliated relationship to impair the
45
Company's interests, and if thus having caused losses to the Company, they shall be
liable for compensation.
Article 146 Where the supervisors violate the law, administrative regulations,
regulations of ministries and commissions or these Articles of Association when
performing their duties and thus cause losses to the Company, they shall be liable for
compensation.
Section 2 Board of Supervisors
Article 147 The Company shall set up a board of supervisors. The board of
supervisors shall be composed of 3 supervisors, have one chairman and may include
vice chairman(men). The chairman and vice chairman(men) of the board of supervisors
shall be elected by more than half of all the members of the board of the supervisors.
The chairman of the board of supervisors shall convene and preside over the meeting
of the board of supervisors; where the chairman of the board of supervisors is unable to
or fails to perform his duties, the vice chairman(men) shall convene and preside over
the meeting of the board of supervisors; where the vice chairman(men) is unable to or
fails to perform his duties, a supervisor shall be chosen by more than half of all the
supervisors to convene and preside over the meeting of the board of supervisors.
The board of supervisors shall include the shareholders' representatives and an
appropriate proportion of representatives of the Company's staff and workers, which
shall not be less than 1/3. The representatives of staff and workers in the board of
supervisors shall be elected by the Company's staff and workers at the meeting of the
representatives of the staff and workers, the meeting of the staff and workers, or in any
other democratic manner.
Article 148 The board of supervisor shall exercise the following functions and
powers:
(1) examining the periodical reports of the Company as prepared by the board of
directors and giving its examination opinions in writing;
(2) inspecting the Company's financials;
(3) supervising the acts of directors and senior executives in performing their duties,
and proposing the removal of directors and senior executives who violate laws,
administrative regulations, these Articles of Association or resolutions adopted by
the shareholders’ meeting;
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(4) requiring directors and senior executives to rectify acts that impair the interests of
the Company;
(5) proposing to hold the interim shareholders’ meeting, and convening and presiding
over the shareholders’ meeting where the board of directors fails to fulfill such
duties as prescribed in the Company Law;
(6) raising proposals to the shareholders’ meeting;
(7) proposing for convening an interim meeting of the board of directors;
(8) filing suits against the directors and senior executives according to Article 151 of
the Company Law;
(9) may investigating upon the discovery that Company’s business is abnormal; when
necessary, may engaging professional parties including accounting firms and law
firms, etc. to assist in their work and the expenses thereof shall be borne by the
Company.
(10) Requiring the directors, senior executives and internal audit personnel to attend the
meeting of the board of supervisors and address the questions raised by the board
of supervisors; and
(11) Other powers and functions as set forth in laws, administrative regulations, rules
or these Articles of Association.
Article 149 The board of supervisors shall hold at least one meeting of the board
of supervisors every six months. The supervisors may propose to hold interim meetings
of the board of supervisors. Resolutions of the board of supervisors shall require
approval from more than half of all the supervisors.
Article 150 The board of supervisors shall devise procedural rules for the meeting
of the board of supervisors and define the discussion methods and voting procedures of
such meetings, so as to ensure the work efficiency and scientific decision making of the
board of supervisors.
Article 151 The board of supervisors shall record all matters under discussion and
attending supervisors shall sign the minutes of the meeting of the board of supervisors.
Supervisors shall have the right to require that explanatory records of their speeches be
made in the meeting minutes. Minutes of the meeting of the board of supervisors shall
be kept on Company file for at least 10 years.
Article 152 The notice of the meeting of the board of supervisors shall include the
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following:
(1) date, place and time limit of the meeting;
(2) matters and topics for discussion; and
(3) issuing date of the notice.
Chapter 9 Financial and Accounting Systems, Profit Distribution and Auditing
Section 1 Financial and Accounting Systems
Article 153 The Company shall formulate its financial and accounting systems in
accordance with the laws, administrative regulations and the provisions of relevant
State authorities.
Article 154 The Company shall submit and disclose its annual report to the CSRC
and the stock exchange concerned within four months after the end of each fiscal year,
and submit and disclose an interim report to the local agency of the CSRC and the stock
exchange concerned within two months after the end of the first half of each fiscal year.
The aforesaid annual and interim reports shall be prepared according to the relevant
laws, administrative regulations, provisions of the CSRC and the stock exchange
concerned.
Article 155 The Company shall not establish any other accounting books except
for the statutory ones. No assets of the Company shall be deposited in any account
opened in the name of any individual.
Article 156 When distributing each year's after-tax profits, the Company shall
withdraw 10% of its after-tax profits for the Company's statutory common reserve fund.
When the aggregate balance in the statutory common reserve fund is 50% or more of
the registered capital of the Company, it is not necessary to withdraw any profits.
When the Company's statutory common reserve fund is not sufficient to make up for
the Company's losses of the previous year, profits of the current year shall be used to
make up for the losses before allocations are made for the statutory common reserve
fund in accordance with the previous paragraph.
After having withdrawing the statutory common reserve fund from the after-tax profits,
the Company may also, with the approval of the resolution of the shareholders' meeting,
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withdraw any common reserve fund from the after-tax profits.
After the Company has made up its losses and made allocations to its common reserve
fund, the remaining after-tax profits shall be distributed in proportion to the number of
shares held by the shareholders, unless otherwise specified by these Articles of
Association.
If the shareholders' meeting violates the provisions in the preceding paragraph and
profits are distributed to the shareholders before the Company makes up for losses or
makes allocations to the statutory common reserve fund, the profits distributed in
violation of the provisions must be returned by such shareholders to the Company.
The shares held by the Company itself shall not participate in profit distribution.
Article 157 The common reserve fund of the Company is used to make up its
losses, expand its production and operations or for conversion into additional capital of
the Company. However, the capital reserve fund shall not be used for making up losses
of the Company.
When the statutory common reserve fund is converted to capital, the balance of such
fund shall be no less than 25% of the registered capital prior to such conversion.
Article 158 After the shareholders’ meeting has adopted the resolution on the plan
for distribution of the Company's profits, the board of directors of the Company shall
complete the distribution of dividends (or shares) within two months from the date of
the shareholders' meeting.
The dividends or other payment distributed to the shareholders of the domestic shares
by the Company shall be calculated and announced in RMB and paid in RMB; the
dividends or other payment distributed to the shareholders of domestically listed
foreign-funded shares by the Company shall be calculated and announced in RMB and
paid in Hong Kong Dollar; dividends of domestically listed foreign-funded shares may
be remitted out of China according to provision of laws and rules.
The required Hong Kong dollars regarding the dividends or other payment distributed
to the shareholders of domestically listed foreign-funded shares shall be settled
according to relevant provision of foreign exchange of China. The applicable exchange
rate shall be the intermediate price of the Hong Kong Dollar in exchange to RMB
announced by the People’s Bank of China on the first working day after the resolution
of the shareholder’s meeting.
Article 159 The Policy and Decision-making Process of Distributing Profits of the
Company
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(I) General principles of distributing profits of the Company
1. The Company shall fully consider the return to investors and distribute the profits
of shares to the shareholders according to the proportion of the profit available for
distribution as set forth in the consolidated statements of the current year.
2. The Company shall implement a continuous and stable profit distribution policy,
taking into account the long-term interests of the Company, the overall interests of
all shareholders and the sustainable development of the Company;
3. Where a shareholder occupied the Company's funds in violation of rules, when the
Company distributes profits, those funds occupied by the shareholder shall be
deducted from cash dividends supposed to be allocated to him.
(II) The interval of distribution of profits
Where the Company is profitable and its profit available for distribution is positive in
the current year, the Company shall distribute the profits once a year generally. Where
the Company's profit scale, cash flow status and demand for funds in the current period
allows, interim dividends may be distributed.
(III) The specific policies for distribution of profits are as follows:
1. The form of distribution of profits: the Company may use cash, shares or cash and
shares in combination, or other ways permitted by laws and regulations to distribute
profits.
2. The conditions and proportion of distributing cash dividends of the Company:
The Company shall distribute cash dividends if the Company is profitable and its
accumulated undistributed profits are positive in the current year, and there are no
significant investment plans or major cash disbursements which will affect the
distribution of profits.
The standard of the abovementioned significant investment plans or major cash
disbursements shall be construed with relevant provisions as required by the Listing
Rules of Shenzhen Stock Exchange.
The annual cash distribution of profits of the Company shall not be less than 10%
of profit available for distribution of the year, and the cumulative cash distribution
of profits of the Company shall not be less than 30% of average annual profit
available for distribution during the last three years.
3. The conditions of distributing stock dividends of the Company
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Where the Company well operates and the board of directors believes that the
issuance of stock dividends is beneficial to the overall interests of all shareholders
of the Company, the board of directors may, in the case of satisfying the conditions
of abovementioned cash dividends, propose a stock distribution plan for dividend
of the Company.
(IV) The examination and deliberation procedure of profit distribution plan:
1. The board of directors shall, according to the situation of profitability, the supply
and demand of funds, propose a plan for the distribution of profits, and discuss the
reasonableness of such plan, and the independent directors shall issue independent
opinions on the profit distribution plan. The profit distribution plan shall be
submitted to the board of directors and the board of supervisors for examination,
deliberation and approval, and after approved by the board of directors and the
board of supervisors, the plan shall be submitted to the shareholders' meeting for
examination and deliberation.
When examining and deliberating the profit distribution plan, the voting method
adopted by the shareholders' meeting may be online voting under special
circumstances in addition to on-site voting.
Minority shareholders and independent directors may collect voting rights
according to these Articles of Association, for the full exercise of shareholders'
voting rights by the shareholders. When the shareholders’ meeting examines and
deliberate the cash dividend plan, it should communicate with shareholders,
especially minority shareholders through a variety of channels, ensure that
communication channels are smooth, fully listen to the views and claims of minority
shareholders, and answer questions of minority shareholders promptly.
2. Where the Company is profitable and accumulated undistributed profit of the
Company of the current year is positive, but fails to propose a cash profit
distribution plan, the board of directors should make special clarifications as to the
specific reasons for not distributing cash profit, the specific use of the retained
earnings of the Company and expected return on such investment, etc., which shall
be submitted to the shareholder’s meeting for examination and deliberation after
opined on by the independent directors.
(V) Adjustment of profit distribution policy
Where, due to major changes in external business environment or its own operating
conditions, the Company does need to alter the profit distribution policy set forth in the
Articles of Association. Such alteration shall be approved by the board of directors after
examination and deliberation thereof and then submitted to the shareholders’ meeting
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for examination and deliberation, and shall be approved by more than 2/3 of the voting
rights of shareholders (or proxies thereof) who attend the shareholders' meeting. The
adjusted profit distribution plan shall not violate the relevant provisions of the CSRC
and Shenzhen Stock Exchange. When examining and deliberating such alteration, the
Company shall provide shareholders with way of online voting.
Section 2 Internal Audit
Article 160 The Company shall implement the internal auditing system and have
such full-time auditors to undertake internal audit and supervision over the financial
income, expenditures and the economic activities of the Company.
Article 161 The Company's internal auditing system and the duties of the auditors
shall be implemented after approved by the board of directors. The person in charge of
the audit shall be responsible and report work to the board of directors.
Section 3 Appointment of Accounting Firms
Article 162 Accounting firms that conforms to the provisions of the Securities
Law shall be engaged by the Company to render such services as the auditing of
accounting statements, verification of net assets and other relevant consulting matters.
The appointment of accounting firms will be valid for one year and may be renewed.
Article 163 The appointment by the Company of accounting firms shall be
decided by the shareholders' meeting, and the board of directors shall not appoint the
accounting firm before the resolution is adopted by the shareholders' meeting.
Article 164 The Company shall ensure to provide the engaged accounting firm
with authentic and complete accounting evidence, accounting books, financial and
accounting reports and other accounting materials, and shall not refuse to provide,
conceal or falsely report them.
Article 165 The auditing fee for the accounting firm shall be decided by the
shareholders' meeting.
Article 166 Where the Company dismisses or does not renew the mandate of the
accounting firm, it shall inform the accounting firm 30 days in advance to such effect.
Where the shareholders’ meeting votes on the dismissal of the accounting firm, the
accounting firm shall be permitted to state its opinions.
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Where the accounting firms resign, the accounting firm shall report to the shareholders'
meeting whether there is any abnormal situation found in the Company.
Chapter 10 Notices and Announcements
Section 1 Notice
Article 167 Any notice of the Company shall be sent out by the following means:
(1) personal delivery;
(2) mail;
(3) e-mail or fax;
(4) announcement;
(5) any other means prescribed in these Articles of Association.
Article 168 Where the notice of the Company is sent out by the means of
announcement, upon the said announcement the notice shall be deemed to have been
effectively served to all parties concerned.
Article 169 The notice of the shareholders' meeting held by the Company shall be
sent out by means of announcement.
Article 170 The notice of the meeting of the board of directors shall be sent out
by means of personal delivery, mail, e-mail or fax, except as provided otherwise in this
Article.
Article 171 The notice of the meeting of the board of supervisors shall be sent out
by means of personal delivery, mail, e-mail or fax.
Article 172 Where the notice is sent out by personal delivery, it shall be deemed
effectively served on the day when the receiver signs (seals) the return receipt; where
by mail, on the fifth working days after being turned over to the post office; where by
means of email and fax and there are evidence proving such sending out, on the day of
sending out; where by means of announcement, on the day of the first public
announcement.
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Article 173 Where the meeting notice is not sent to the person entitled to receive
the same due to any accidental omission or where no meeting notice is received by such
person, the validity of the meeting and of any resolution adopted at the meeting shall
not be thus invalid.
Section 2 Announcement
Article 174 The Company designates China Securities Journal and Securities
Times as the Chinese newspaper for release of Company's announcement and
disclosure of other information; The Company designates http://www.cninfo.com.cn as
the website for the publication of Company's announcement and disclosure of other
information.
Chapter 11 Merger/Consolidation, Spin-off, Capital Increase, Capital Reduction,
Dissolution and Liquidation
Section 1 Merger/Consolidation, Spin-off, Capital Increase and Capital Reduction
Article 175 Company mergers/consolidations may be classified into mergers or
consolidations.
Merger is where one Company merges with another Company whereby the absorbed
Company shall be dissolved. Consolidation is where at least two companies are
consolidated into a new Company whereby the consolidated parties are dissolved
respectively.
Article 176 The merger/consolidation of companies shall require a
merger/consolidation contract signed by all the merger/consolidation parties and the
balance sheet and inventory of properties shall be prepared. The Company shall within
10 days from the date of the merger/consolidation resolution is made, notify its creditors
and make the announcement in relevant medias within 30 days. The creditors may,
within 30 days from the date of the receipt of the said notice or if receiving no notice
within 45 days from the date of the said announcement, ask the Company to discharge
the Company's debts or provide the relevant guarantees.
Article 177 Upon the merger/consolidation of the Company, the credit and debts
of all the relevant merger/consolidation parties shall be succeeded by the Company
surviving the said merger/consolidation or the newly-established Company.
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Article 178 In the case of the spin-off of the Company, its assets shall be divided
correspondingly.
In the case of the spin-off of the Company, the balance sheet and the inventory of
properties shall be prepared. The Company shall inform its creditors within 10 days
from the date of division resolution, and make an announcement in relevant medias
within 30 days.
Article 179 For the debts of the Company prior to the said spin-off, the Company
existing thereafter shall bear the joint and several liabilities, unless otherwise specified
in the written agreement which is concluded before the said spin-off by the Company
with its creditors on the discharge of the Company's debts.
Article 180 Where the Company needs to reduce its registered capital, it shall
prepare the balance sheet and the inventory of properties.
The Company shall notify its creditors within 10 days from the date of resolution on
decrease in the registered capital and make the announcement in relevant media within
30 days. The creditors shall, within 30 days from the date of the receipt of the said
notice or if failing to receive such notice within 45 days from the date of the said
announcement, have the right to ask the Company to discharge the Company's debts or
provide the relevant guarantees.
The registered capital after the decrease therein by the Company shall not be lower than
the minimum amount specified by law.
Article 181 Where the Company undertakes merger/consolidation or spin-off thus
altering its registration items, it shall handle according to the law the formalities of
alteration of its registration with the Company registration authority; where the
Company is dissolved, it shall cancel its registration legally; where a new Company is
established, it shall deal with Company establishment registration formalities in
accordance with the law.
The Company shall, if increasing or decreasing its registered capital, handle the
alteration registration formalities with the Company registration authority in
accordance with the law.
Section 2 Dissolution and Liquidation
Article 182 The Company may be dissolved due to any of the followings reasons:
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(1) pursuant to these Articles of Association, the operational period of the Company
has expired or one of the other events which are grounds for dissolution has
occurred;
(2) resolution of dissolution made by the shareholders' meeting;
(3) dissolution is necessary due to the merger/consolidation or spin-off of the Company;
(4) business license is revoked, canceled or it is ordered to close down, according to
the law; or
(5) if the Company has great difficulties in business operation and management and its
continuation may incur significant losses to the shareholders, which cannot be
solved by other means, then the shareholders holding more than 10% of the voting
shares of the Company may request to the people's court for dissolution of the
Company.
Article 183 The Company may survive by amending its Articles of Association
in the case of the circumstance mentioned in Item (1) of Article 182.
Any amendment hereto pursuant to the preceding paragraph shall require the approval
of more than 2/3 of the voting rights represented by the shareholders attending the
shareholders' meeting.
Where the Company is dissolved in accordance with the provisions in Items (1) , (2),
(4), and (5) of Article 182 hereof, it shall establish a liquidation group within 15 days
from the date of occurrence of the cause of liquidation to commence liquidation
proceedings. The liquidation group shall be composed of directors or the persons
decided by the shareholders' meeting. Where the liquidation group fails to be
established within the time limit, the creditors of the Company may apply to the people's
court, requesting the people's court to establish the liquidation group to start liquidation
proceedings.
Article 184 The liquidation group shall discharge the follows duties during its
liquidation:
(1) liquidating the Company's assets, and respectively preparing the balance sheet and
the inventory of assets;
(2) notifying and making an announcement to the creditors;
(3) transacting the unfinished businesses of the Company in connection with the
liquidating;
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(4) making full payment of taxes owed and taxes imposed during the process of
liquidation;
(5) clearing the creditor's claims and debt;
(6) handling the residual properties after the Company has discharged its debts; and
(7) representing the Company in any civil litigations.
Article 185 The liquidation group shall notify the creditors within 10 days from
the date of its establishment and make the announcement within 60 days in newspaper
appointed by the CSRC. The creditors shall, within 30 days from the date of the receipt
of the said notice, or if failing to receive such notice, within 45 days from the date of
the said announcement, declare their creditors' rights to the liquidation group.
When reporting claims, the creditors shall explain matters relevant to their claims and
shall provide evidentiary materials. The liquidation group shall register creditor's
claims.
During the declaration of the creditor's claims, the liquidation group shall not discharge
the debts of creditors.
Article 186 The liquidation group shall, after having liquidated the Company'
assets and prepared the balance sheet and the inventory of properties, formulate the
liquidation plan and submit it to the shareholders' meeting or the people's court for
confirmation.
The portion of the Company's properties remaining after they are used to pay for the
liquidation expense, salary of the staff and workers, social insurance expense, statutory
compensation, and the taxes and debts in arrears, shall be distributed by the Company
in proportions to shares held by the shareholders.
The Company shall, during the liquidation period, remain in existence, but shall not
carry out activities irrelevant to the liquidation. The Company's properties, before they
are used to discharge the Company's debts in accordance with the preceding paragraph,
may not be distributed to the shareholders.
Article 187 Where after liquidating the Company's properties and preparing the
balance sheet and the inventory of properties, the liquidation group discovers that the
Company's properties are insufficient to repay the Company's debts, it shall apply for
bankruptcy to the people's court.
After the Company is declared bankrupt by ruling of the people's court, the liquidation
group shall transfer liquidation matters to the people's court.
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Article 188 After the completion of the liquidation, the liquidation group shall
devise a liquidation report and submit it to the shareholders' meeting or the people's
court for confirmation and also to the Company registration authority for cancellation
of the Company's registration and then shall announce the termination of the Company.
Article 189 Members of the liquidation group shall be faithful to their duties and
fulfill their liquidation obligations in accordance with the law.
Members of the liquidation group shall not abuse their powers to accept bribery or any
other illegal income, nor misappropriate the Company's properties.
Where members of the liquidation group incur losses to the Company or the creditors
thereof intentionally or due to gross negligence, they shall be liable to compensation.
Article 190 Where the Company is lawfully declared bankrupt, it shall carry out
bankruptcy liquidation in accordance with laws concerning the bankruptcy of
enterprises.
Chapter 12 Amendments to the Articles of Association
Article 191 The Company shall amend these Articles of Association in any of the
following circumstances:
(1) after the Company Law or other relevant laws or administrative regulations are
amended, the matters specified under these Articles of Association are in conflict
with the provisions of the laws, or administrative regulations as amended;
(2) any change occurs in the Company and it is thus not in conformity with the matters
recorded in the Company's Articles of Association; or
(3) any amendment to the Articles of Association of the Company is decided by the
shareholders' meeting.
Article 192 Where any amendment to the Articles of Association of the Company
as passed by resolution of the shareholders' meeting requires the examination and
approval of the competent authority, such amendment shall be submitted to the
competent authority for approval; where registration matters are involved, the
formalities of amending registration shall be handled according to the law.
Article 193 The board of directors shall amend these Articles of Association in
accordance with the resolutions adopted by the shareholders' meeting on amendment to
the Company's Articles of Association and pursuant to the approval opinions of the
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competent authority.
Article 194 Where any amendment to these Articles of Association is related to
information required by laws and regulations to be disclosed, such amendment shall be
announced in accordance with the relevant provisions.
Chapter 13 Supplementary Provisions
Article 195 Definitions
(1) The "controlling shareholders" shall refer to the shareholders whose holdings of
shares account for more than 50% of the total shares in the Company; or
shareholders who hold less than 50% of the total shares in the Company but whose
shares can represent such voting rights as sufficient to greatly affect the resolutions
made by the shareholders' meeting.
(2) The "actual controllers" shall refer to the persons, other than shareholders, who are
able to actually control the acts of the Company through investment relationship,
according to agreement or by any other arrangement.
(3) The "affiliated relationship" shall refer to the relationship between the Company's
controlling shareholders, actual controllers, directors, supervisors, senior
executives, and enterprises directly or indirectly under their control, as well as any
other relationship which may cause transfer of the Company's interests. However,
the relationship between State-controlled enterprises is not an affiliated relationship
due to the fact that such enterprises are under the common control of the State.
Article 196 The board of directors may, in accordance with its Articles of
Association, formulate detailed rules for implementation of these Articles of
Association which shall not go against the provisions thereof.
Article 197 These Articles of Association shall be written in Chinese. Where a
version in any other language or a different version is in conflict with these Articles of
Association, the most recently approved Chinese version as registered with Market
Regulation Administration of Hubei Province shall prevail.
Article 198 Such terms as "no less than", "within" and "no more than" used in
these Articles of Association shall include the given figures; such terms as "beyond",
"less than" and "more than" used in these Articles of Association shall exclude the given
figures.
Article 199 These Articles of Association shall be interpreted by the board of
directors of the Company.
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Article 200 Any appendix to these Articles of Association shall include the
procedural rules of the shareholders' meeting, the meeting of the board of directors and
the meeting of the board of supervisors respectively.
Article 201 These Articles of Association shall come into effect on the date of
resolution of shareholder’s meeting thereof.
ADAMA Ltd.
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