RULES OF PROCEDURES OF THE BOARD OF DIRECTORS
ADAMA LTD.
Amended in March 2023
CONTENTS
CHAPTER I GENERAL PROVISIONS ...... 1
CHAPTER II COMPOSITION AND DUTIES OF THE BOARD OF DIRECTORS ...... 1
CHAPTER III PREPARATION OF MEETINGS ...... 7
CHAPTER IV PROPOSALS SUBMITTED TO THE MEETINGS ...... 9
CHAPTER V NOTICES OF MEETING ...... 9
CHAPTER VI HOLDING OF MEETING ...... 10
CHAPTER VII RESOLUTIONS AND RECORDS ...... 12
CHAPTER VIII INFORMATION DISCLOSURE ...... 14
CHAPTER IX SUPPLEMENTARY PROVISIONS ...... 14
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CHAPTER I GENERAL PROVISIONSArticle 1 These rules are hereby formulated to regulate the activities of the board of directorsof ADAMA Ltd. (hereafter referred to as the “Company”) and the members thereof, specify theduties and authorizations of the board of directors of the Company, fully play the function of theboard of directors in the operation and decision making, ensure the legitimacy, normalization,scientificity and democratization of the decision making of the board of directors, and meet the needfor the establishment of modern corporate system.Article 2 These rules are formulated pursuant to Law of the People’s Republic of China onCompanies (hereafter referred to as “Law on Companies”), Code of Corporate Governance forListed Companies promulgated by China Securities Regulatory Commission (hereafter referred toas the “Code”), the Guidelines of Shenzhen Stock Exchange on Self-discipline Supervision of ListedCompanies No.1: Standardized Operation of Main Board Listed Companies, Rules for Listing ofStock on the Shenzhen Stock Exchange and Articles of Association of ADAMA Ltd. (hereafterreferred to as the “AOA”).
Article 3 The board of directors of the Company and the members thereof shall comply withthe provisions of the Law on Companies and other laws, administrative regulations, regulations ofministries and commissions , the AOA and these rules, and undertake the duty of loyalty and alsothe duty of diligence to the Company.
CHAPTER II COMPOSITION AND DUTIES OF THE BOARD OF DIRECTORS
Article 4 The board of directors shall perform the following function 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 plans and investment scheme of the Company;
(4) preparing the annual financial budgets and final accounts of the Company;
(5) preparing the proposals on profit distribution and loss recovery scheme of the Company;
(6) preparing the proposals on the increase or decrease of registered capital, issuance of bondsor other securities and the listing of the Company;
(7) To draw up the proposals on major acquisitions of the Company, acquisition of Company
shares, or merger/consolidation, spin-off or dissolution of, or changes to the corporate formof the Company;
(8) within the scope of authorization granted by the Shareholders’ Meeting and subject to
Article 7 below, deciding on such matters as external investment, acquisition and sale of
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assets, creation of securities on assets, external guarantee, trust investment, affiliatedtransactions 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 the President and CEO and secretary
of the board of directors of the Company, as well as their remuneration andreward/punishment; according to the nominations by the President & CEO, deciding onappointing or dismissing the Chief Financial Officer and General Legal Counsel, anddeciding on their remuneration, rewards and punishments;
(11) deciding on the basic management system of the Company;
(12) preparing the proposals on amendments to the AOA;
(13) managing the information disclosure of the Company;
(14) submitting proposals to the Shareholders’ Meeting on the engagement or replacement ofthe accounting firm which provides auditing services to the Company;
(15) hearing the President and CEO’s work report and inspecting their work; and
(16) performing other functions and powers as conferred by the laws, administrative regulations,regulations of ministries and commissions and the AOA.The board of directors of the Company shall establish an audit committee, and establish therelevant specialized committees such as strategies, nomination, remuneration and appraisal, etc.where necessary. The specialized committees shall be accountable to the board of directors, performduties pursuant to the AOA and the authorization of the board of directors, and submit proposals tothe board of directors for deliberation and decision. All members of the specialized committees shallbe directors. The independent directors shall constitute the majority of the audit committee, thenomination committee and the remuneration and appraisal committee and act as the convener, andthe convener of the audit committee shall be an accounting professional. The board of directors shallbe responsible for formulation of working procedures for the specialized committees andstandardize the operations of the specialized committees.
Article 5 The Board of Directors shall hear the opinions of the Party Committee of theCompany before making material decisions on the appointment and removal of important personneland material business and management matters of the Company.
Article 6 The board of directors of the Company shall explain to the Shareholders’ Meetingany non-standard audit opinions issued by certified public accountants on the Company’s financialstatements.
Article 7 The board of directors shall have powers regarding the transactions which meet one
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of the following criteria:
(1) The total amount of assets involved in the transaction exceeds 20% of the latest audited totalassets of the company. If the assets involved in the transaction have book value and appraisalvalue 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% ofthe latest audited net assets of the Company and the absolute amount is more than RMB 20million. If the assets involved in the transaction have book value and appraisal valueconcurrently, 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 20million;
(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 2million;
(5) The amount of the transaction (including indebtedness and expenses) exceeds 20% of the latestaudited 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, andthe absolute amount is more than RMB 2 million;
(7) External guarantee: any guarantee other than the guarantee stipulated in Article 41 of the AOA;
(8) Affiliated transaction: the affiliated transaction between the company and affiliated natural
person exceeds RMB 300,000; the affiliated transaction between the company and affiliatedlegal person (or other organizations) exceeds RMB 3 million and exceeds 0.5% of the latestaudited net assets of the company;
(9) Securities investment: the total amount exceeds 10% of the latest audited net assets of thecompany, and the absolute amount being more than RMB 10 million. Securities investmentforesaid includes placement or subscription of new shares, securities repurchase, stockinvestment, bond investment, entrusted financial management (including bank financialproducts, trust products) and other investment behavior identified by the Shenzhen StockExchange.
If any amount above is negative amount, the absolute amount shall be used for calculationpurpose.
With respect to the exercise of aforesaid powers, the Board of directors shall perform the dutyto disclose information in accordance with Listing Rules for Stocks Traded on Shenzhen StockExchange.
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The board of directors shall establish strict reviewing and decision-making procedures; formajor investment projects, the functional department or branch manager of the company shallconduct feasibility analysis and demonstration, and the company shall organize experts andprofessionals including lawyers and accountants to review and issue opinions from financial andlegal perspectives, after being reviewed and approved by the Board of directors, the opinions willbe submitted to Shareholders’ Meeting for discussion and will be implemented after being approvedby the Shareholders’ Meeting. The Shareholders’ Meeting shall have powers regarding transactionswhich meet one of the following criteria:
(1) The total amount of assets involved in the transaction exceeds 50% of the latest auditedtotal assets of the company. If the assets involved in the transaction have book value and appraisalvalue 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 50million. 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 exceeds50% of the latest audited revenue of the company, and the absolute amount is more than RMB 50million;
(4) The net profit of the target of the transaction (i.e. equity interests) in the latest year exceeds50% of the latest audited net profit of the company, and the absolute amount is more than RMB 5million;
(5) The amount of the transaction (including indebtedness and expenses) exceeds 50% of thelatest 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 thecompany receives cash as gift and the company provides guarantee) between the company andaffiliate 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 thecompany, 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 amountof the assets or the amount of the transaction, whichever is higher, as the calculation criteria and theamount 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 theshareholders’ meeting for consideration and shall be adopted by more than two thirds of the voting
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rights held by the shareholders present at the meeting.
If any amount above 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 saleof assets (excluding the purchase of raw materials, fuel and power, and the sale of products,commodities and other assets related to daily operations, but the purchase and sale of such assetsinvolved in the assets swap is still included), (2) external investment (including entrusted financialmanagement, investment in subsidiaries, etc.); (3) providing financial support (including entrustedloans, 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 orbusiness; (7) gifting assets or being gifted; (8) claims or debt restructuring; (9) transferring oracquiring 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 tosubscribe for capital contributions); (12) other transactions identified by the Shenzhen StockExchange.The external donation shall comply with the External Donation Management Measures of ADAMALtd.
Article 8 The board of directors shall be composed of five [5] directors, with two [2]independent directors therein. The board of directors shall have one [1] board chairman. Thechairman of the Company shall be elected by more than half of all the directors. The Company willnot have any director as the representatives of the staff and workers.The chairman of the board of directors shall have the following powers and duties:
(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 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 9 The board of directors of the Company shall establish the mechanism “freezingupon embezzlement” applicable to the shares held by the controlling shareholder, namely, in casethat the controlling shareholder and its subsidiaries are discovered to embezzle the Company’s assets,
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an application shall be immediately submitted to the judicial authority pursuant to the law for thejudicial freezing of the shares held by the controlling shareholder so that the embezzled assets whichcannot 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 theprimary responsibilities for the mechanism “freezing upon embezzlement”, and the Chief FinancialOfficer, the secretary of the board of directors shall assist the chairman of the board of directors inconducting the work of “freezing upon embezzlement”.The procedures are specified in detail as follows:
(1) The Chief Financial Officer shall report in writing to the chairman of the board of directors on
the date discovering the embezzlement of the Company’s assets by the controlling shareholder;if the controlling shareholder is the chairman of the board of directors, the Chief FinancialOfficer shall concurrently report to the secretary of the board of directors and the chairman ofthe board of supervisors when reporting in writing to the chairman of the board of directors onthe date discovering the embezzlement of the Company’s assets by the controlling shareholder;The report shall contain such contents as the name of the controlling shareholder embezzlingthe assets, the name of the embezzled assets, the location of the embezzled assets, the time ofembezzlement, the amount involved and the term of recovery to be required;Where it is discovered that any director or officer of the Company assists or connives in thecontrolling shareholder’s and its subsidiaries’ embezzlement of the Company’s assets, the ChiefFinancial Officer shall specify in the written report the name of such director or officer and thedetails of such assistance or connivance in the controlling shareholder’s and its subsidiaries’embezzlement of the Company’s assets.
(2) The chairman of the board of directors shall, based on the written report of the Chief FinancialOfficer, urge the secretary of the board of directors to notify each director in writing or by emailand hold an interim meeting of the board of directors considering the term required forcompensating the controlling shareholder, the decision on punishment on the director or officerliable for the embezzlement, the application to the judicial authority for freezing the shares heldby the controlling shareholder and other relevant matters;If the chairman of the board of directors is the controlling shareholder or the controllingshareholder of the controlling shareholder, the secretary of the board of directors shall immediatelynotify each director in writing or by email, and hold an interim meeting of the board of directors inaccordance with the provisions of Law on Companies and the AOA examining and deliberating theterm required for compensating the controlling shareholder, the decision on punishment on thedirector or officer liable for the embezzlement, the application to the judicial authority for freezingthe shares held by the controlling shareholder and other relevant matters with the affiliated directorshall withdraw from such examination and deliberation;
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For directors who bears serious responsibilities, the board of directors shall submit to theShareholders’ Meeting for a resolution after examining and deliberating on the relevant decision onpunishment.
(3) The secretary of the board of directors shall, according to the resolution of the board ofdirectors, send a notice to the controlling shareholder requiring making recovery in the specifiedperiod of time, implement the decision on punishment on the relevant director or officer, conductthe application to the judicial authority for freezing the shares held by the controlling shareholderand other relevant matters, and appropriately make the disclosure of the relevant information;
The Company and its board of directors shall provide the secretary of the board of directorswith the convenience for handling the aforesaid matters, including issuing the power of attorney,supply guarantee for the application for judicial freezing, acceding to requests by the secretary ofthe board of directors for the engagement of intermediary agencies giving assistance, and assumethe relevant costs;
After the Shareholders’ Meeting of shareholders of the Company has examined, deliberated onand approved the relevant matters, the secretary of the board of directors shall timely notify thedirector who bears serious responsibilities and draft the documents regarding the punishment andhandle the relevant procedures.
(4) If the controlling shareholder fails to make recovery within the given time period, theCompany shall apply to the competent judicial authority for selling the frozen shares so as to recoverthe embezzled assets within 30 days after the expiration of the given time period, and the secretaryof the board of directors shall appropriately make the disclosure of the relevant information.
CHAPTER III PREPARATION OF MEETINGS
Article 10 The meetings of the board of directors consist of regular meetings and interimmeetings of the board of directors. The meetings of the board of directors shall be convened andpresided over by the chairman of the board of directors, and if the chairman of the board of directorscannot preside in person due to any reason, then by a director to be elected by half or more of thedirectors
Article 11 The board of directors shall hold at least two meetings a year which shall beconvened by the chairman of the board of directors. The board of directors shall notify all directors,supervisors and the President and CEO 10 days in advance of the meeting.
Article 12 The chairman of the board of directors shall convene an interim meeting of theboard of directors within ten days:
(1) if necessary as the chairman of the board of directors deems;
(2) if requested by the shareholder(s) representing 1/10 or more of the voting right;
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(3) if requested jointly by 1/3 or more of the directors;
(4) if requested by the independent directors;
(5) if requested by the board of supervisors; or
(6) if requested by the President and CEO.
The shareholding percentage held by the shareholder(s) requesting an interim meeting of theboard of directors under paragraph (2) above shall not be less than 10% prior to the board of directorsadopts the resolution.Article 13 The board of directors shall have one secretary responsible for preparing theShareholders’ Meetings of shareholders and the meetings of the board of directors, keepingdocuments, managing the information of the Company’s shareholders, and conducting theinformation disclosure and other matters. The preparations for the meetings of the board of directorsinclude:
(1) preparing documents to be submitted to the meeting;
(2) printing and sending the notices on and the information regarding the meeting;
(3) collecting the issues and opinions rendered by the directors prior to the meeting, timelyreporting the same to the chairman of the board of directors or the person convening the meetingand making necessary explanations to the directors so as to improve the efficiency of theconsideration at the meeting; and
(4) arranging the place and conditions of the meeting.
Article 14 The secretary of the board of directors shall be responsible for making thedocuments of the board of directors and sending the same to the directors and other personsattending the meeting without the right to vote prior to the meeting.
The board of directors shall prior provide sufficient information to all directors, including thebackground of the proposals submitted to the meeting and the information and data helpful for thedirectors to understand the progress of the Company’s business. If 2 or more independent directorsdeem the information not being sufficient or the demonstration not being compelling, they mayjointly request in writing the board of directors to postpone the meeting of the board of directorsor the examination and determination of the relevant matter, and the board of directors shall acceptsuch request.
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CHAPTER IV PROPOSALS SUBMITTED TO THE MEETINGSArticle 15 The chairman of the board of directors, the shareholder(s) representing 1/10 or moreof the voting right, 1/3 or more of the directors, the independent directors, the board of supervisorsand the President and CEO may submit proposals.Article 16 Each proposal submitted to the board of directors shall satisfy the followingconditions:
(1) Its contents shall not conflict with the provisions of the laws, administrative regulationsor AOA, and fall in the business scope of the Company and the duties of the board of directors, andshall include but not limited to:
(i) the proposals submitted to the Shareholders’ Meeting for examination and deliberationand the matters regarding the convening of the Shareholders’ Meeting;
(ii) the matters under Chapter III hereof on which the board of directors shall be entitledto exercise its right; and
(iii) such other matters conducted by the board of directors as provided in the AOA andauthorized by the Shareholders’ Meeting;
(2) It must be submitted in a written form. The written form shall contain the name andcontents of the proposal, and the recommended conclusion.Article 17 All proposals submitted to the board of directors must be collected by the secretaryof the board of directors and then furnished to the chairman of the board of directors or the personconvening the meeting for review. The chairman of the board of directors or the person conveningthe meeting must list the proposals in the agenda of the meeting of the board of directors and deliverto the board of directors for consideration except for the proposals not satisfying the conditionsunder Articles 15 and 16.
CHAPTER V NOTICES OF MEETING
Article 18 The notice of the regular meeting of the board of directors shall be sent to alldirectors in a written form ten days prior to the meeting, but the notice of the interim meeting of theboard of directors may be sent to the directors orally or in a written form 2 days prior to the meeting.With the unanimous consent of all the directors, the convening of the interim board meeting maynot be restricted by the aforementioned notice time limit, provided that a record thereof shall bemade in the minutes of the board of directors and signed by all participating directors.
The written form referred to in this article includes the text form, mail, email, facsimile andetc.
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Article 19 The notice of the meeting of the board of directors shall be drafted by the secretaryof the board of directors based on the matters for discussion of the meeting, approved by thechairman of the board of directors, and then sent. The notice generally contains the followingcontents:
(1) the date and place of the meeting;
(2) the specified time of the meeting;
(3) the matters for discussion and agenda items; and
(4) the issuing date of the notice.
Any director may waive the right to receive the notice of the meeting of the board of directors.Any director attending the meeting and not making objection to non-receipt of the notice of meetingprior to the meeting or at the meeting shall be deemed to have been sent the notice of the meeting.
CHAPTER VI HOLDING OF MEETING
Article 20 The meeting of the board of directors may be held only if a majority of the directorsare present.
Article 21 A director shall attend the meeting of the board of directors in person, or if not ableto attend for cause, may in writing appoint another director as his/her proxy to attend on his/herbehalf. The power of attorney shall indicate the name of the proxy, matters conducted by the proxy,authorizations and term of validity, and may be valid only if signed or affixed to the seals by theappointer. The director attending the meeting on another director’s behalf shall exercise their rightswithin the authorizations. A director not attending a meeting in person or by proxy shall be deemedto waive the right to vote at that meeting.
An independent director not able to attend the meeting in person or via teleconference mayappoint another independent director to attend on his/her behalf. An independent director may notbe entrusted by any director other than the independent directors so as to keep his/her independencyas an independent director, and non-independent director shall also not be entrusted by independentdirector.
Article 22 The directors shall carefully read the documents regarding the meeting served bythe board of directors and fully consider and prepare comments on each proposal.
Article 23 The President and CEO and other officers of the Company may attend the meetingof the board of directors without the right to vote, and any officer who is not a director may not havethe right to vote. The supervisors may attend the meeting of the board of directors without the rightto vote, and address inquiries or proposals on the matters to be resolved by the board of directors.
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The board of directors may convene other persons in connection with the agenda items of themeeting to introduce the relevant information or hear the relevant opinions at the meeting. Anyperson attending the meeting who is not a director shall neither participate in the consideration ofdirectors, nor affect the progress of the meeting or the vote or the adoption of resolutions at themeeting.Article 24 All directors attending the meeting shall explicitly speak out their opinions on theproposals listed in the meeting notice. On principle, the meeting of the board of directors may notexamine and deliberate on any agenda item or matter not listed in the meeting notice. In specialcases, the proposals provisionally made by the directors and the suggestions made by the supervisorsshall be submitted in writing and accompanied with the relevant explanations, collected by thesecretary of the board of directors and reported to the chairman of the board of directors three daysprior to the meeting. A provisionally added agenda item or matter may be considered and resolvedonly if agreed by two thirds or more of the directors attending the meeting. If necessary, thechairman of the board of directors or the person presiding over the meeting may trigger the votingprocedure to vote on whether or not an agenda item or a matter may be added.Article 25 When the board of directors holds the meeting, the chairman of the board ofdirectors or the person presiding over the meeting shall firstly declare the agenda items and thenpreside over the consideration as per the agenda items. The chairman of the board of directors orthe person presiding over the meeting may decide on the time for the consideration of each agendaitem, whether or not the discussion shall be ceased, whether or not the next agenda item shall beconducted, and etc.The chairman of the board of directors or the person presiding over the meeting shallconscientiously preside over the meeting, fully listen to the opinions of the directors attending themeeting, control the progress of the meeting, save the time, and improve the efficiency of theconsideration and the scientific decision making.Article 26 The chairman of the board of directors or the person presiding over the meetingmay decide on that the agenda items listed in the notice will be considered item by item and votedindividually or considered individually and voted collectively. Each director attending the meetingshall render his/her affirmative vote or negative vote or abstention from voting.
Article 27 If any resolution is required and may be adopted, such resolution shall be adoptedprior to the closing of the meeting. If it is necessary to make further research on or material alterationto any proposal, such proposal may be altered under the authorization and then reconsidered at suchtime and in such manner as determined at the meeting. Should there be materially different opinionsamong the directors prior to the vote on the proposals and draft resolutions required to be voted,such proposals and draft resolutions may be restrained from voting if requested by the chairman ofthe board of directors or the convener and agreed by a majority of the directors attending the meeting.Should the proposer of any proposal request to withdraw that proposal prior to the vote, theconsideration on that proposal shall be terminated at the meeting if agreed by the chairman of theboard of directors or the convener.
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Article 28 When considering and voting on the relevant matters or proposals, each directorattending the meeting of the board of directors shall fully speak out his/her suggestions andcomments on the considered matters in an attitude conscientious and responsible to the companyand be liable for his/her own vote.Article 29 Each director and supervisor attending the meeting shall appropriately keep thedocuments of the meeting. The directors, supervisors and other persons attending the meetingwithout the right to vote shall be responsible for keeping and obligated to keep confidential allcontents of the documents of the meeting and the consideration at the meeting before the contentsof the resolutions are formally disclosed to the public.
CHAPTER VII RESOLUTIONS AND RECORDS
Article 30 The meeting of the board of directors may be held only if a majority of the directorsare present. The board of directors may adopt a resolution only if approved by a majority of alldirectors.
Each director shall have one vote when the board of directors votes on a resolution.
Article 31 Should a director be related to an enterprise which is involved in a resolution to bedecided at a meeting of the board of directors, such director may neither vote on that resolution, norvote on behalf of other director. That meeting of the board of directors may be held only if a majorityof the unrelated directors are present, and the resolutions may be adopted at that meeting only ifapproved by a majority of the unrelated directors. If the unrelated directors attending the meetingare less than 3, the matters shall be submitted to the Shareholders’ Meeting of shareholders forconsideration.
Article 32 Voting method at the meeting of the board of directors: open ballot.
The interim meeting of the board of directors, on the precondition of ensuring the fullexpression by directors of their opinions, may adopt resolutions by communication and requiresignatures of the attending directors.
Article 33 The resolutions adopted at the meeting of the board of directors shall be recordedin writing and signed by the directors attending the meeting who shall be liable for the resolutionsof the board of directors.
Should any resolution of the board of directors violate any laws, regulations or AOA and theCompany incur losses arising therefrom, the directors participating in such resolution shall be liableto indemnify the Company, provided that if it’s proven that any director has expressed his/herobjection when voting and such objection has been recorded in the minutes of meeting, such directormay be exempted from the liabilities.
Article 34 The resolutions adopted at the meeting of the board of directors contain thefollowing contents:
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(a) the time when and the manner in which the meeting notice was sent;(b) the person presiding over the meeting, the time, place and manner of the meeting, and theexplanations on whether the provisions of the applicable laws, ordinances, regulations and the AOAhave been complied with;
(c) the number and names of the directors attending the meeting in person or by proxy, thenumber and names of the absent directors and the reason for such absence, and the names ofentrusted directors;(d) the descriptions of the contents (or titles) of the proposals considered and voted at themeeting, and the respective numbers of affirmative votes, negative votes or abstention on each votedproposal or matter (if each proposal or matter considered and voted at the meeting is approvedunanimously, such circumstance may be described together) and the reason for the directors torender negative votes or abstain;(e) the name, reason and avoidance of each director involved in a related transaction (if any);(f) the descriptions of the prior ratification or opinions rendered by the independent directors,if the independent directors are required to prior ratify or independently express their opinions; and(g) the detailed contents of the matters considered and the resolutions adopted at the meeting.Article 35 The written minutes shall be made with respect to the meeting of the board ofdirectors, and shall be complete and true. The secretary of the board of directors shall carefullyorganize and tidy up the minutes on the matters considered at the meeting. The directors attendingthe meeting and the person making the minutes shall sign the minutes.The directors attending the meeting may require to have explanatory notes of his/her speech atthe meeting recorded in the minutes. The minutes shall be the important basis for identifying theliabilities of the directors in the future.Article 36 The minutes of the meeting of the board of director shall contain the followingcontents:
(1) the date, place and the name of the convener of the meeting;
(2) the names of the directors attending the meeting, the names of the directors (proxies)attending the meeting under the entrustment by other directors and also the name any other personinvited by the board of directors to participate in the meeting ;
(3) the agenda of the meeting;
(4) the key points of the speeches of the directors; and
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(5) the manner and result of voting on each resolved matter (the voting result shall indicatethe numbers of affirmative votes, negative votes or abstention).Article 37 The resolutions and minutes of the meeting of the board of directors shall be keptby the secretary of the board of director as the important archives for at least ten years.
CHAPTER VIII INFORMATION DISCLOSURE
Article 38 The board of directors of the Company shall strictly comply with the provisions ofChina Securities Regulatory Commission, Hubei Regulatory Bureau of China Securities RegulatoryCommission and Shenzhen Stock Exchange regarding the information disclosure applicable to theCompany’s stocks, and fully, timely and accurately disclose the matters considered and resolutionsadopted by the board of directors and required to be disclosed. The information regarding anysignificant matter must be at the first time reported to Shenzhen Stock Exchange and filed with thecompetent regulatory agency.
Article 39 If the independent directors render their independent opinion on any matter requiredto be disclosed, the Company shall announce such independent opinion. If the independent directorshold different opinions and cannot reach a consensus, the board of directors shall respectivelydisclose each of such different opinions.
CHAPTER IX SUPPLEMENTARY PROVISIONS
Article 40 In case of any conflict between these rules and Law on Companies, Law onSecurities and the AOA, the aforesaid laws, ordinances, regulations and AOA shall prevail.
Article 41 The Company may amend these rules if:
(1) Law on Companies or the relevant laws or administrative regulations shall be amendedand therefore the provisions of these rules conflict with such amended laws or administrativeregulations; or
(2) The Shareholders’ Meeting shall decide to amend these rules.
Article 42 Any amendment to these rules shall be decided by the Shareholders’ Meeting, andthe Shareholders’ Meeting authorizes the board of directors to draft the amendment. The amendmentshall become effective after having been approved by the Shareholders’ Meeting.
Article 43 The references to “more” or “within” following a figure in these rules shall includethat figure, and “exceed”, “less than” or “in excess of” following a figure in these rules shall notinclude that figure.
Article 44 The board of directors shall have the right to interpret these rules.
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Article 45 These rules shall become effective and be implemented from the date whenapproved by the Shareholders’ Meeting of the Company.
ADAMA Ltd.