Articles of Association of ADAMA Ltd.
December 2023(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 ...... 11
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 ...... 21
Chapter 5 Board of Directors ...... 28
Section 1 Directors ...... 28
Section 2 Board of Directors ...... 32
Chapter 6 Party Committee ...... 40
Chapter 7 President and CEO and Other Senior Executives ...... 41
Chapter 8 Board of Supervisors ...... 44
Section 1 Supervisors ...... 44
Section 2 Board of Supervisors ...... 45
Chapter 9 Financial and Accounting Systems, Profit Distribution and Auditing ...... 47
Section 1 Financial and Accounting Systems ...... 47
Section 2 Internal Audit ...... 51
Section 3 Appointment of Accounting Firms ...... 512
Chapter 10 Notices and Announcements ...... 52
Section 1 Notice ...... 52
Section 2 Announcement ...... 53Chapter 11 Merger/Consolidation, Spin-off, Capital Increase, Capital Reduction, Dissolution andLiquidation ...... 534
Section 1 Merger/Consolidation, Spin-off, Capital Increase and Capital Reduction ...... 534
Section 2 Dissolution and Liquidation ...... 55
Chapter 12 Amendments to the Articles of Association ...... 578
Chapter 13 Supplementary Provisions ...... 58
Chapter 1 General Provisions
Article 1 These Articles of Association of ADAMA Ltd.(hereinafter referredto as “Company”) are formulated pursuant to the Company Law of the People'sRepublic of China (hereinafter referred to as “Company Law”), the Securities Law ofthe People's Republic of China (hereinafter referred to as “Securities Law”) and otherrelated provisions, with a view to safeguarding the legitimate rights and interests of theCompany, its shareholdings and creditors, and regulating the organizational structuresand acts of the Company.
In accordance with the Charter of the Communist Party of China (“CPC”) and theRegulation 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 overallsituations and ensure the implementation of the decisions, and discuss and decide majorissues of the enterprise in accordance with regulations. The Company shall establishthe working organization of the Party, have Party personnel in accordance with the lawand guarantee there are adequate funds for the work of Party organization.
Article 2 The Company was restructured from former Shashi Pesticide Factoryof Hubei Province as a company limited by shares in accordance with the CompanyLaw and other relevant provisions.
As approved in “E Gai [1992]02” Document issued by the Commission for EconomicRestructuring of Hubei Province, the company is established as per raising capital byprivate placement, registered with the Administration for Industry and Commerce atHubei Province, and obtained its business license. The social credit code of theCompany 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 datedSeptember 27, 1993, the Company initially offered 30,000,000 ordinary Renminbicommon shares which shall be subscribed by inbound investors by Renminbi to thepublic, 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 “ZhengWei Fa[1997]23” Document, the Company initially offered 115,000,000 domesticallylisted foreign-funded shares which shall be listed domestically and subscribed byforeign currency to outbound investors and was listed on Shenzhen Stock Exchange onMay 15 and 25, 1997.
Article 4 Registered name of the CompanyFull name in Chinese: 安道麦股份有限公司Full name in English: ADAMA Ltd.
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, JingzhouDevelopment 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 thecompany.
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 andthe 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 comeinto force, become a document legally binding upon the organizational structure andacts of the Company, upon the relationship of rights and obligations between theCompany and its shareholders and between or among shareholders themselves, andupon the Company, its shareholders, directors, supervisors and senior executives. Theshareholders may, in accordance with these Articles of Association, bring lawsuitsagainst other shareholders, or the Company's directors, supervisors, President and CEOand other senior executives, or the Company. The Company may also bring lawsuitsagainst its shareholders, directors, supervisors, President and CEO and other seniorexecutives.
Article 11 “Other senior executives” where used in these Articles of Association shallrefer to Chief Financial Officer and the secretary of the board of directors followingtheir 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 comprehensiveadvantages, promote technological progress, strengthen the development of agriculturalchemicals and related industries, improve the domestic and foreign market share,strengthen enterprise management, improve economic efficiency, and ensure assetvalue increase.
Article 13 Subject to registration according to the law, the Company's business
scope is: manufacture and sales of pesticides, chemical products (including hazardousindustrial gas); the import and export trade of pesticides, chemicals and intermediatesthereof, chemical mechanical equipment and spare parts thereof; manufacturing andsales of chemical mechanical equipment; manufacture and installation of steel structure;installation of chemical engineering; cargo handling and warehousing services.
Chapter 3 Shares
Section 1 Share OfferingArticle 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 fairmanner. 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 pricesof each of such shares shall be the same; for shares subscribed by any unit or individual,each of such shares shall be paid at the same value.
Article 16 The face value of each shares offered by the Company shall beRenminbi 1.
Article 17 Shares issued by the Company shall be uniformly deposited atShenzhen Branch of China Securities Depository and Clearing Corporation Limited.
Article 18 In August, 1992, the Bureau for State Property Administration ofShashi, Hubei Province converted net operating assets in total amount of Renminbi60,764,900 into capital contribution as 59,663,400 State shares, and raised capital byprivate placement from the employees, who subscribed 15,270,500 shares to establishthe Company.
Article 19 The total number of the Company's shares is 2,329,811,766, amongwhich 2,177,071,961 Renminbi ordinary shares, 152,739,805 domestically listedforeign-funded shares.
Article 20 The Company or its subsidiaries (including its affiliated enterprises)shall not, by such means as donation, advancement, guarantee, compensation, loan orotherwise, provide anyone who purchases or plans to purchase the Company's shareswith financial assistance.
Section 2 Share Increase, Decrease and RepurchaseArticle 21 The Company may, for the purpose of its operation and developmentand in accordance with the laws and regulations, adopt the following means for increasein 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 bythe CSRC.
Article 22 The Company may reduce its registered capital. If its registered capitalis reduced, the Company shall comply with the Company Law, and other relevantprovisions and procedures as prescribed in these Articles of Association.
Article 23 The Company shall not acquire its own shares, except under any of thefollowing circumstances:
(1) decreasing the Company's registered capital;
(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 onthe 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 opencentralized trading, or via any other method recognized by laws and regulations and theCSRC.
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 buybackby the Company under any of the circumstances stipulated in item (1) and item (2) ofArticle 23; a resolution of the Board meeting presented by two-thirds or more of thedirectors is required for a Company's share buyback under any of the circumstancesstipulated 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 fallsunder 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 theprovisions of Article 23 falls under the circumstances set out in item (2) or item (4), theshares shall be transferred or deregistered within six months; where a share buyback bythe Company pursuant to the provisions of Article 23 falls under the circumstances setout in item (3), item (5) or item (6), the total number of shares held by the Companyshall not exceed 10% of the total number of shares issued by the Company, and theshares 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 ofpledge.
Article 28 The directors, supervisors and senior executives of the Company shallreport to the Company their shares in the Company and any alterations to the shares soheld, and the shares transferred annually by them during their terms of office shall notexceed 25% of their total shares in the Company; their shares in the Company shall notbe transferred within the first year after the Company's stocks are listed. The aforesaidpersons shall not transfer their shares in the Company for the period of six months afterthey resign from the Company.
Article 29 Where the Company's shareholders which hold more than 5% of thetotal shares of the Company, directors, supervisors and senior executives sell theirstocks 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 obtainedshall be confiscated by the Company and be revoked by the board of directors of theCompany. 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 effortsunderwriting, or where there are any other circumstances stipulated by the CSRC.
Shares or other securities of equity nature held by directors, supervisors, seniorexecutives and natural-person shareholders referred to in the preceding paragraph shallinclude 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 directorsof the said provisions within 30 days. Where the board of directors fails to observe theprovisions of this Article 29 within the aforesaid time limit, the shareholders shall beentitled 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’ meetingsSection 1 ShareholdersArticle 30 The Company shall, according to the evidence provided by ShenzhenBranch of China Securities Depository and Clearing Corporation Limited, prepare aregister of shareholders, which serves as sufficient evidence for the Company's sharesheld by the shareholders. Shareholders shall enjoy rights and bear responsibilitiesaccording to the kinds of shares held by them; shareholders with the same kind of sharesshall enjoy equal rights and bear the same obligations.
Article 31 When the Company holds the shareholders’ meeting, distributes stockdividends, goes into liquidation proceedings or conducts other acts requiring theidentification of shareholders, the board of directors or the convener of the shareholders’meeting shall decide on the equity registration date and shareholders who are recordedin the said register after the closing of the equity registration date shall be theshareholders 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 thenumbers 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 businessoperation 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 ofCompany debentures, minutes of the shareholders’ meeting, resolutions of theboard of directors, resolutions of the board of supervisors, and financial andaccounting statements;
(6) participating in the distribution of the Company's remaining properties in
accordance with their shareholdings, upon the termination or liquidation of theCompany;
(7) demanding the Company to acquire the shares of the shareholders who raise
objections to the merger/consolidation and spin-off resolutions adopted by theshareholders’ meeting; and
(8) other rights prescribed in laws, administrative regulations and regulations, other
regulations of ministries and commissions, and the provisions of these Articles ofAssociation.
Article 33 Where requesting access to the information mentioned in thepreceding Article, or asking for the relevant documents, the shareholders shall providethe Company with written documents evidencing the kinds of Company's shares theyhold and the number of such shareholdings, and the Company, after verifying theidentity of the shareholders, shall provide them with the said information and relevantdocuments as per the requirements of the shareholders according to the law.
Article 34 Where the resolutions adopted by the shareholders’ meeting and themeeting of the board of directors violate laws and administrative regulations andregulations, the shareholders shall be entitled to request judgment by the people's courtthat such resolutions are null and void.
Where the convening procedures and voting methods of the shareholders’ meeting andboard of directors violate laws, administrative regulations or these Articles ofAssociation, or the contents of the resolutions adopted by the shareholders’ meetingand the meeting of the board of directors contravene these Articles of Association, theshareholders shall be entitled to, within 60 days from the date of such resolutions aremade, 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 andthereby cause losses to the Company, the shareholders who for more than 180consecutive days hold singly or jointly over 1% of the Company's shares shall beentitled to request in writing the board of supervisors to file a suit with the people'scourt; where the board of supervisors violates any laws, administrative regulations orany of Articles of Association in fulfilling its duties and thereby causes losses to theCompany, the shareholders may request in writing the board of directors to file a suitwith the people's court.
Where the board of directors and the board of supervisors refuse to file lawsuits afterhaving received a written request from the shareholders as described in the precedingparagraph, 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 maypossibly cause irreparable losses to the Company, the shareholders as prescribed in thepreceding paragraph shall be entitled to file suits directly to the people's court in theirown names.
Where the infringement of the lawful rights and interests of the Company by anotherhas caused losses to the Company, the shareholders as prescribed in the first paragraphof this Article may in line with the provisions described under the preceding twoparagraphs file a suit with the people's court.
Article 36 Where the violation of laws, administrative regulations or theprovisions hereof by the directors and senior executives has caused losses to theshareholders, 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 oftheir capital contributions;
(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 othershareholders; not to abuse the independent legal person status of the Company andthe limited liabilities of shareholders to harm the interests of the creditors of theCompany;
(5) other obligations which shall be born in line with the laws, administrativeregulations and the provisions hereof.
Where abuse by the Company's shareholders of their rights has caused losses to theCompany or other shareholders, such shareholders shall bear the compensationliabilities in accordance with the law.
Where the abuse by the Company's shareholders of the Company's independent legalperson status and the shareholders' limited liabilities, for evasion of their debts, hasseriously damaged the interests of the creditors, such shareholders shall bear severaland joint liabilities for the debts of the Company.
Article 38 If shareholders with more than 5% of the voting shares of theCompany pledge their shareholdings, they shall submit a report in writing to theCompany on the day of the said pledge.
Article 39 Controlling shareholders and actual controllers of the Company shallnot use their affiliated relationships to harm the interests of the Company. Otherwise,they shall be liable to compensate the Company against losses the Company suffereddue to such violation of the regulations.
Controlling shareholders and actual controllers shall act in good faith to the Companyand other public shareholders thereof. Controlling shareholders shall strictly and legallyexercise the rights of capital contributors and shall not impair the lawful rights of theCompany and other public shareholders by such means as profit distribution, assetsrestructuring, external investment, appropriation of funds, borrowing and loanguarantee, nor shall they with their controlling status damage the interests of theCompany and other public shareholders.
The transaction between the Company and the controlling shareholders or actualcontrollers regarding provision of funds, commodities and services and other asset shallstrictly comply with decision-making procedures of affiliate transaction and fulfillingexamination and deliberation procedure of the board of directors and shareholders’meeting, the affiliated director and shareholder shall withdraw from voting. TheCompany shall not provide funds, commodities, services or other asset to theshareholder and actual controller without consideration or on manifestly unfair terms;or provide guarantee to a shareholder or actual controller that is noticeably unable tomake repayment; or providing guarantee to a shareholder or actual controller withoutjustifiable reasons; or relinquish debt against a shareholder or actual controller withoutjustifiable reasons; or assume debts of a shareholder or actual controller withoutjustifiable reasons.
The directors, supervisors and senior executives of the Company shall have theobligation to preclude the asset of the Company from being occupied by a controllingshareholder or its affiliated enterprise. Where the directors and senior executives of theCompany assist and connive a controlling shareholder or its affiliated enterprise tomisappropriate 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 orwarn against the direct responsible person, and submit the issue of whether to removea director who bears serious responsibility to the shareholders’ meeting for vote. Theboard of directors of the Company shall establish the mechanism “freezing uponembezzlement” applicable to the shares held by the controlling shareholder, namely, incase that the controlling shareholder and its subsidiaries are discovered to embezzle theCompany’s assets, an application shall be immediately submitted to the judicialauthority pursuant to the law for the judicial freezing of the shares held by thecontrolling shareholder so that the embezzled assets which cannot be recovered in cashmay be recovered through the sale of the frozen shares. The chairman of the board ofdirectors of the Company shall be the person undertaking the primary responsibilitiesfor 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 directorsin conducting the work of “freezing upon embezzlement”
The specific implementing procedures are as follows:
1. The Chief Financial Officer, upon discovering that a controlling shareholdermisappropriate the asset of the Company, shall report to the chairman of the boardof directors in writing on the same day of such discovery; where the chairman ofthe board of directors is a controlling shareholder, the Chief Financial Officer shallreport to the chairman of the board of directors, and, at the same time, report to thesecretary of the board of directors and chairman of the supervisory board in writingon the day of discovering that a controlling shareholder misappropriated the assetof the Company; the content of the report shall include the name of the controllingshareholder which occupies the asset, the name of the occupied asset, the timeperiod of occupation, the amount of money involved and estimated term ofcompensation, etc.; where it is discovered that a director or senior executive assistor connive a controlling shareholder or its affiliated enterprise to misappropriatethe asset of the Company, the Chief Financial Officer shall specify the name andthe circumstances of assistance and connivance to the controlling shareholder orits affiliated enterprise to misappropriate the asset of the Company of the directoror senior executive involved in the written report.
2. The chairman of the board of directors shall urge the secretary of the board ofdirectors to inform the directors in writing or by email and convene an interimmeeting of the board of directors to examine and deliberate the term ofcompensation for the controlling shareholder, the decision of punishment againstthe responsible director or senior executive and application for freeze of the sharesof the controlling shareholder with judicial department, etc. according to thewritten report of the Chief Financial Officer; if the chairman of the board ofdirectors is a controlling shareholder or a controlling shareholder of a controllingshareholder of the Company, the secretary of the board of directors shallimmediately inform the directors in writing or by email following the receipt of thewritten report of the Chief Financial Officer and convene an interim meeting of theboard of directors according to the Company Law and these Articles of Associationto examine and deliberate the term of compensation for the controlling shareholder,the decision of punishment against responsible director or senior executive andapplication for freeze of the shares of the controlling shareholder with judicialdepartment, etc., and affiliated directors shall withdraw from examination anddeliberation; for directors who bears serious responsibility, the board of directorsshall submit them to shareholders’ meeting for vote after examining anddeliberating relevant punishment decision.
3. The secretary of the board of directors shall send compensation notice within giventime period to the controlling shareholder, execute the punishment decision against
relevant director or senior executive, and apply for judicial freeze of the shares ofthe controlling shareholder with judicial department, etc. and conduct informationdisclosure thereof according to the resolution of the board of the directors; theCompany and the board of directors of the Company shall provide convenience tothe secretary of the board of directors for the said items, including issuing letter ofauthorization, provide guarantee for judicial freeze, approve the secretary of theboard 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 seriousresponsibility in time after relevant items are examined, deliberated and approvedby the shareholders’ meeting, and draft relevant punishment documents and handlewith 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 tocompensate the misappropriated asset within 30 days after the expiration of thegiven time period, and the secretary of the board of directors shall conduct relevantinformation disclosure.
Section 2 General Provisions of Shareholders’ Meetings
Article 40 The shareholders’ meeting is the organ of power of the Company andshall 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 takenby the representatives of the staff and workers, and deciding on the remunerationsof 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 finalcalculation plan of the Company;
(6) examining, deliberating and approving the Company's profit distribution plan andplan 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 inArticle 41 hereof;
(13) examining, deliberating matters regarding the purchase and sales within one yearby the Company of major assets which exceed 30% of the latest audited total assetsof 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
plans; and
(16) examining and deliberating other matters which shall be decided by theshareholders’ 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 beapproved 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 exceeds50% of the latest audited net assets;
(2) Any guarantee made by the Company after the total amount of external guaranteesoffered by the Company and any of the Company's controlled subsidiaries exceeds30% of the latest audited total assets;
(3) The amount of external guarantees provided by the Company within one yearexceeds 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 deliberationprocedure, causing losses to the Company, the relevant responsible person shall bearthe responsibility of compensation, and the Company will give the relevant responsibleperson corresponding punishment according to the economic loss suffered by theCompany and the severity of the situation.
Article 42 There are the annual shareholders’ meeting and the interimshareholders’ meeting. The annual shareholders’ meeting shall be held once a year, andwithin six months from the end of the last fiscal year.
Article 43 The interim shareholders’ meeting shall be held by the Companywithin two months of when one of the following circumstances occurs:
(1) The number of directors is less than the minimum number stipulated under theCompany Law or 2/3 of the number of directors in Article 105 of this AOA;
(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 theCompany 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 provideonline voting to facilitate the shareholders in attending the meeting. If shareholdersattend the shareholders' meeting by the aforesaid means, they shall be deemed to havebeen present.
Article 45 The Company shall engage a law firm to issue legal opinions on thefollowing 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 conveningof the interim shareholders’ meeting to the board of directors. With regard to suchproposal, the board of directors shall, in accordance with the provisions of the laws,administrative regulations, and provisions of these Articles of Association, provide itsfeedback in writing on approval or disapproval within 10 days from the date of thereceipt 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 resolutionof the board of directors; otherwise, the reasons for such disapproval shall be stated andannounced.
Article 47 The board of supervisors shall have the right to propose the conveningof the interim shareholders’ meeting and shall submit its proposal to the board ofdirectors in writing. The board of directors shall, in accordance with the provisions ofthe laws, administrative regulations and these Articles of Association, provide feedbackin writing on approval or disapproval within 10 days from the date of the receipt of thesaid 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 boardof directors. Where the notice changes the original proposal, the approval of the boardof 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 ofthe said proposal, it shall be deemed incapable or fail to fulfill the obligation ofconvening the shareholders’ meeting; the board of supervisor may thereby convene andpreside over the meeting on its own.
Article 48 The shareholders singly or jointly holding more than 10% of the sharesof the Company shall have the right to propose in writing to the board of directors theconvening of the interim shareholders’ meeting. The board of directors shall, inaccordance with the provisions in laws, administrative regulations and these Articles ofAssociation, provide feedback in writing on the approval or disapproval within 10 daysfrom 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 therelevant 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 thesaid proposal, the shareholders which singly or jointly hold more than 10% of the sharesof the Company shall have the right to propose in writing the convening of the interimshareholders’ meeting to the board of supervisors and shall raise their request in writingto the board of supervisors.
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 requestgive notice thereof. If the notice changes the original proposal, the approval of therelevant shareholders shall be required.
Where the board of supervisors fails to send the said notice within the prescribed timelimit, 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'sshares for more than 90 consecutive days may convene and preside the meetingindependently.
Article 49 Where the board of supervisors or the shareholders decide to convenethe shareholders' meeting independently, they shall notify the board of directors inwriting to such effect and file with the stock exchange.
Prior to the announcement of the resolution of the shareholders’ meeting, the totalshares of the convening shareholders shall not be less than 10%.
The board of supervisors or the convening shareholders shall, upon sending the noticeof 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 theboard 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 theregister of shareholders of equity registration date.
Article 51 Where the shareholders’ meeting is held independently by the board ofsupervisors or shareholders, all necessary costs and expenses of the meeting shall beborne by the Company.
Section 4 Proposal and Notice of Shareholders’ meetings
Article 52 The contents of a proposal shall be amongst the functions and powersof the shareholders’ meeting, have clear topics for discussion and detailed resolutionmatters, and be in line with the relevant provisions of the laws, administrativeregulations and these Articles of Association.
Article 53 Where the Company holds the shareholders’ meeting, the board ofdirectors, the board of supervisors and the shareholders that singly or jointly hold morethan 3% of the Company's shares shall have the right to raise proposals to the Company.
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 proposalsand submit them in writing to the convener. The convener shall, within two days afterreceipt 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, afterhaving issued the notice of the shareholders’ meeting, shall not amend proposals whichhave 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 ofthese Articles of Association shall not be voted on or resolved on the shareholders’meeting.
Article 54 For the annual shareholders’ meeting, the convener shall byannouncement notify all the shareholders 20 days prior to the convention of the saidmeeting. For the interim shareholders’ meeting, the convener shall by announcementnotify all the shareholders 15 days in advance. When calculating the notice period, theday when the meeting is held shall not be included.
Article 55 The notice of the shareholders’ meeting shall include the followingcontents:
(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 theshareholders’ meeting and may in writing entrust their proxies to attend the meetingand participate in votes. The proxies of the shareholders may not necessarily be theshareholders 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 tothe election of directors and supervisors, the notice of the shareholders’ meeting shallfully disclose detailed information about such directors and supervisors, including atleast 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 withthe Company or its controlling shareholders and the actual controllers；
(3) disclose the number of Company shares held by the candidates for directors orsupervisors; and
(4) whether candidates for directors or supervisors have received punishments by theCSRC or other departments or warning reprimands from the stock exchange.
Except for the election of directors and supervisors by means of a cumulative votingsystem, 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 theproposals set out in the shareholders’ meeting notice be canceled. In the case of the saidpostponement or cancellation, the convener shall make an announcement statingreasons for such postponement or cancellation at least two working days in advance ofthe 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 takenecessary measures to ensure the normal order of the shareholders’ meetings. The boardof directors and other conveners of the Company shall take measures to prevent actswhich interfere with the shareholders’ meeting, cause disturbance or infringe on thelawful rights of the shareholders, and shall promptly report such acts to the relevantdepartments for investigation and punishment.
Article 59 All shareholders recorded in the register of shareholders on the equityregistration date or their proxies shall have the right to attend the shareholders’ meetingand exercise their voting rights in accordance with the relevant laws, rules and theseArticles of Association.
The interval between the equity registration date and the date of meeting shall not bemore than seven working days. The equity registration date shall not be changed onceit is determined.
Article 60 Where the individual shareholders personally attend the shareholders’meeting, they shall present their identification cards or other valid certificates whichverify their identities, and their stock account cards; where the individual shareholdersentrust their proxies to attend the meeting on their behalf, said proxies shall presenttheir valid identity certificates and the power of attorney from the shareholder.
In the case of legal person shareholders, their legal representatives or proxies entrustedby such legal representatives shall attend the meeting. The legal representatives, ifattending the meeting, shall present their identification cards and valid certificateswhich verify their qualifications as legal representative; where proxies are entrusted bysuch legal representatives to attend the meeting, such proxies shall present theiridentification cards, and the written power of attorney as issued legally by the legalrepresentatives of the legal person shareholders.
Article 61 The power of attorney, as issued by the shareholders, shall indicate thatproxies are entrusted to attend the shareholders’ meeting and shall contain the followingitems:
(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 islisted 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' proxiesmay act at their discretion without specific instructions from the shareholders.
Article 63 Where the power of attorney granted for voting by proxy is signed bya person entrusted by the principal, the authorization letter signed by authorization orother authorization documents shall be notarized. The notarized authorization letter orother authorization documents, as well as the power of attorney granted for voting byproxy shall be kept at the domicile of the Company or at any other place prescribed inthe 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 authorizedby the board of directors or any other decision-making organ.
Article 64 The register of attendants of the shareholders’ meeting shall beprepared by the Company. The register shall expressly record such matters as the nameof the attendant (or of the unit thereof), the identification card number, domicile addressof the attendant, the number of voting shares held or represented by the attendant, andthe name of the principal (or the unit thereof).
Article 65 The convener and the lawyer engaged by the Company shall, inaccordance with the register of shareholders provided by Shenzhen Branch of ChinaSecurities Depository and Clearing Corporation Limited, jointly verify the legality ofthe qualification of each shareholder, and register the full name of and number of votingshares held by each shareholder. Prior to the announcement by the presider of the totalnumber of shareholders who attend the on-site shareholders’ meeting and the totalnumber of the voting shares held by the attending shareholders and proxies, theregistration shall be ceased.
Article 66 At the time of the shareholders’ meeting, all the directors, supervisorsand the secretary of the board of directors of the Company shall attend the meeting, andPresident and CEO and other senior executives shall sit on the meeting.
Article 67 The shareholders’ meeting shall be presided over by the chairman ofthe 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 themajority of all the directors.
If independently convened by the board of supervisors, the shareholders’ meeting shallbe presided over by the chairman of the board of supervisors. Where the chairman ofthe 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 thesupervisors.
Shareholders’ meetings independently convened by the shareholders shall be presidedover by a representative elected by the convener.
Where the presider violates the procedural rules while the shareholders’ meeting isbeing held so that the meeting is unable to continue, a presider may, with the approvalby the majority of voting rights represented by the shareholders present at theshareholders’ 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 saidmeeting, including the notice, registration, examination and deliberation of proposals,ballot, vote calculation, announcement of voting results, formulation of meetingresolutions, meeting minutes and signature, announcement and other items, as well asthe principles by which the shareholders’ meeting authorizes the board of directors. Theauthorized content shall be definite and specific. The procedural rules of theshareholders’ meeting shall be attached as an appendix to the Company's Articles ofAssociation and shall be drafted by the board of directors and approved by theshareholders’ meeting.
Article 69 The board of directors and the board of supervisors shall, at the annualshareholders’ meeting, report their work for the last year to such meeting. Eachindependent 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 recommendationsraised by the shareholders.
Article 71 The presider of the shareholders’ meeting shall, prior to vote, announcethe total number of attending shareholders and proxies, and the total voting shares heldby them. The total number of attending shareholders and proxies, and the total votingshares held by them shall be subject to registration before the shareholders’ meeting.
Article 72 The shareholders’ meeting shall have meeting minutes and these shallbe the responsibility of the secretary of the board of directors. The meeting minutesshall 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 andany other senior executive who attend the meeting with voting right or sit on themeeting;
(3) total number of voting shares held by shareholders (including their proxies) by thedomestic shares and shareholders (including their proxies) of domestically listedforeign-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 ofdomestically listed foreign-funded shares;
(5) inquiries or recommendations of the shareholders and the relevant replies orexplanations thereto;
(6) name of lawyers, vote counters and vote supervisor; and
(7) other items shall be recorded in the meeting minutes in accordance with theprovisions hereof.
Article 73 The convener shall ensure the authenticity, accuracy and completenessof the minutes of the shareholders’ meeting. The attending directors, supervisors,secretary of the board of directors, convener or representative thereof, and the meetingpresider shall sign the meeting minutes. Meeting minutes shall, together with theregister 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 kepttogether for a period of no less than ten years.
Article 74 The convener shall ensure the continuity of the shareholders’ meetinguntil the final resolutions are formed. Where such specific reasons as force majeure orother special causes result in the suspension of the shareholders’ meeting or the failureto adopt a resolution at the meeting, the necessary measures shall be taken to resumethe shareholders’ meeting as soon as possible or to directly close the meeting and makean immediate announcement. At the same time the convener shall report to the CSRCoffice 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 thevoting 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 boardof directors;
(3) appointment and dismissal of members of the board of directors and the board ofsupervisors, remunerations to them and the method for payment of suchremunerations;
(4) annual budget plan and final calculation plan of the Company;
(5) annual report of the Company; and
(6) other matters which shall be passed by special resolution in accordance with theprovisions of the laws, administrative regulations or these Articles of Association.
Article 77 The following matters shall be passed at the shareholders’ meeting byspecial 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 theamount of the guarantee provided by the Company exceeds 30% of the latestaudited 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 theymay have significant potential influences upon the Company and shall be passed byspecial resolution.
Article 78 Shareholders (including proxies thereof) shall exercise their votingrights as represented by the number of voting shares held by them, and each share shallhave one voting right.
The votes casted by minority investors shall be separately counted when materialmatters affecting the interests of minority investors are being examined and deliberatedat the shareholders’ meeting. The results of the separate vote-counting shall be publiclydisclosed in a timely manner.
The shares held by the Company shall have no voting rights in themselves and shall notbe 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 ofthe Securities Law in purchasing voting shares, the voting right of the part that hasexceeded the prescribed proportion shall not be exercised within 36 months after thepurchase, and such part of shares will not be included in the total number of votingshares held by the attending shareholders.
The board of directors, independent directors, shareholders holding more than 1% ofthe voting shares or the investor protection institutions statutorily set up may publiclycollect the voting rights of shareholders.
Article 79 The board of directors shall decide whether the relevant items proposedto be submitted to the shareholders’ meeting for examination and deliberation constituteaffiliated transaction according to the laws, rules and the Listing Rules of ShenzhenStock Exchange. Where the board of directors decide that the items proposed to besubmitted to the shareholders’ meeting for examination and deliberation constituteaffiliated transaction, it shall inform the affiliated shareholders in writing.
The board of directors shall complete the aforesaid work before sending the notice ofthe shareholders’ meeting, and disclose the details of the affiliated party in connectionwith the item proposed to be submitted to the shareholders’ meeting for examinationand deliberation.
When the shareholders’ meeting examines and deliberates affiliated transactions, theaffiliated shareholders shall submit the application to refrain from voting upon suchaffiliated transactions, and other parties shall have the right to require such shareholdersto refrain from voting. The affiliated shareholders may explain and clarify the affiliatedtransaction concerning themselves and whether such transaction is fair and legal andreason thereof to the shareholders’ meeting, but such shareholders shall not have rightto vote with regard to this affiliated transaction and the number of voting rightsrepresented by them shall not be calculated in the total number of valid votes; theannouncement 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, Presidentand CEO and senior executives, which specifies the entrustment by the Company of themanagement 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 andsupervisors:
The incumbent board of directors and board of supervisors and shareholders whichmeet certain conditions may nominate candidates of directors and supervisors inaccordance with the provisions in laws, administrative regulations and these Articles ofAssociation.
1. The Board of Directors of the Company or the shareholders singly or jointly holdingmore than 3% of the shares of the Company may nominate candidates to serve asnon-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 toserve as supervisors who are non-representatives of the employees.
3. The Board of Directors of the Company or the shareholders singly or jointly holdingmore than 1% of the shares of the Company may nominate candidates to serve asindependent directors. An investor protection institution established in accordancewith the laws may publicly request shareholders to entrust it to exercise the right tonominate independent directors on their behalf. The above-mentioned nomineesshall not nominate individuals with interests or other closely related individualswho may affect independent performance as independent director candidates.
The nominator of an independent director shall nominate the nominee with suchnominee’s prior consent. The nominator shall adequately understand the profession,academic qualifications, professional titles, detailed work experience, all part-time jobsof 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’sserving as an independent director, and the nominee shall make a public statement onhis independence and other qualifications serving as an independent director. Beforethe convening of the shareholders’ meeting relating to the election of the independentdirector, the board of directors shall announce said content according to relevantregulations.
4. In addition to other items provided in this article, the board of directors shallannounce the resume and basic information of each candidate director and supervisorto 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 inaccordance with these Articles of Association or the resolution adopted by theshareholders’ meeting, the cumulative voting system may be used.
The "cumulative voting" stated in the preceding paragraph shall mean when theshareholders’ meeting is electing directors or supervisors, each share shall have thesame number of voting rights as the number of candidate directors or supervisors whoare up for election, and the voting rights of all the shareholders may be exercised in acentralized manner, or distributed to two or more candidate directors with all votes, andthe candidate who obtained more votes shall be elected.
1. The specific voting method to vote upon the election of directors shall be:
(1) The voting upon the election of independent directors and common directors shallbe separated. The specific method is:
When voting upon the election of independent directors, the number of voting rightsof each shareholder shall be the product of the shares he held multiplies the numberof independent directors he is entitled to vote, and such numbers of voting rightshall only be voted to independent directors.
When voting upon the election of common directors, the number of voting rights ofeach shareholder shall be the product of the shares he held multiplies the number ofcommon directors he is entitled to vote, and such numbers of voting right shall onlybe voted to common directors.
(2) When filling out the ballot, a shareholder may distribute to one candidate directorswith all voting power he held, or distributed to several candidate directors andindicate the voting power distributed to each candidate thereafter. If a shareholderspecifically disapproves any one or more candidates and vote for others, the nameof the person being voted shall be filled in and indicating with the voting powerdistributed to such candidate thereafter.
(3) Where the total number of voting power on a vote exceeds the legitimate numberof 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 legitimatenumber 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 candidateshall be announced, and the directors elected shall be determined based upon thenumber of votes obtained by candidate directors.
(6) The principle of election of directors: the final directors elected shall be determinedbased upon the number of votes obtained by candidate directors, but the lowestvotes obtained by each director elected shall be more than half of the voting powerof 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 thevotes obtained by them in descending order. However, the number of voting rightsof 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 ofdirectors to be elected, the said candidate directors shall be voted again accordingto the procedures set forth in this article until the director is elected.
(9) If a proxy vote fails to elect required number of a kind of directors requiredaccording to Articles of Association, the candidate directors with inadequateamount of votes shall be voted again and if the number of directors elected still failsto 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 directorsshall be responsible in construing the specific method of proxy vote set forth inthese Articles of Association and ensure the shareholders to execute their votingrights correctly.
2. The election of supervisors of the shareholders’ meeting of the Company shall beexecuted in accordance with the method of voting upon the election of directors setforth hereof.
Article 82 In addition to the cumulative voting, the shareholders’ meeting maytake a vote on all the proposals item by item. Where different proposals are submittedfor 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 proposalsunless the meeting is suspended or they are unable to adopt a resolution as a result ofparticular reasons such as force majeure and otherwise.
Article 83 The shareholders’ meeting, when examining and deliberating theproposals, shall not amend them, otherwise, the relevant amendment shall be deemedas 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 ariseby 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, twoshareholders shall be elected by the shareholders’ meeting to participate in the votecalculation and supervision. If shareholders have any relation with the matters to beexamined and deliberated on, the concerned shareholders and proxies thereof shall nottake part in the vote calculation and supervision.
When the shareholders’ meeting is voting on proposals, the lawyers, representatives ofshareholders and supervisors shall be jointly responsible for the vote calculation andsupervision thereof and for the announcement of the voting results which shall berecorded into the minutes of the meeting.
Shareholders of Company or their proxies who cast votes via internet or through anyother means shall have the right to examine their voting results by accessing to thecorresponding voting system.
Article 87 The onsite shareholders’ meeting shall not be terminated earlier thanthe shareholders’ meeting held through the internet or by any other means. The presiderof the onsite shareholders’ meeting shall announce the votes and voting results of eachproposal 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 relatedparties involved in the shareholders' meeting held onsite, through the internet or by anyother means shall bear obligation of confidential on the voting results.
Article 88 The attending shareholders shall give their opinions on the proposalssubmitted for vote, being: affirmative, negative or abstention vote, except that asecurities registration and settlement institution serving as the nominal holder of thestocks under Inter-connected Mechanism for Trading on Stock Markets in the Mainlandand 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 shallbe deemed as abstention, and the voting results represented by the shares of theabstention voter shall be filled with "abstention".
Article 89 Where the presider has any doubt about the voting results, he mayorganize to have the number of votes counted; where the presider fails to do so and theattending shareholders or the proxies thereof challenge the voting results announced by
the presider, they are entitled to require the counting of votes immediately upon theannouncement of the voting results and the presider shall organize the vote calculationwithout delay.
Article 90 The resolutions of the shareholders’ meeting shall be announcedpromptly and such announcement shall indicate the number of shareholders of domesticshares and foreign-funded shares which attend the meeting, the number of voting sharesheld by them, the proportions of their voting shares in the total voting shares of theCompany, the voting methods, the vote results of each proposal and the particulars ofeach resolution adopted.
Article 91 Where the proposals fail to be passed by the shareholders’ meeting orthe previous resolutions of the last shareholders’ meeting are altered at the currentshareholders’ meeting, special indications shall be made in the announcement of thesaid meeting.
Article 92 Where the shareholders’ meeting passes a proposal concerning electionof directors and supervisors, the starting time of their assumption of office shall be thedate of resolution of the shareholders’ meeting is made, and in the case of a supervisoras a representative of the employees shall be the date of resolution of the employeerepresentatives' meeting is made.
Article 93 Where the shareholders’ meeting passes a proposal regarding thedistribution of cash dividends, share granting or conversion of common reserve fundinto share capital, the Company shall implement the detailed plan for such proposalswithin two months from the closing of the shareholders’ meeting.
Chapter 5 Board of DirectorsSection 1 Directors
Article 94 The directors of the Company shall be natural persons, they shall notact 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 ofcorruption, bribery, infringement of property, misappropriation of property orsabotaging the social economic order, where less than five years have elapsed sincethe date of completion of said sentence; having been deprived of their politicalrights 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 orenterprise which has gone into bankruptcy or liquidation proceeding, and beingpersonally responsible for such bankruptcy, where less than three years haveelapsed since the closing of the said bankruptcy or liquidation;
(4) having served as the legal representative of a Company or enterprise whose businesslicense has been revoked or which has been order to close down due to the violationof 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 theirmaturity;
(6) having been prohibited from accessing the securities market by the CSRC, wherethe specified prohibition period has not yet finished;
(7) having been announced by the Stock Exchange that it is not appropriate for him tobe the director of a listed Company;
(8) having been punished by the administrative sanctions of the CSRC in the past 36months or having been publicly denounced by the Stock Exchange in the past threeyears;
(9) having been suspected of committing a crime and a case has been put on file by thejudicial organs to investigate or suspected of violating the law or rules and a casehas 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, suchelection, appointment or employment shall be null and void. Where the circumstancesas prescribed in this Article take place during the term of any director, such directorshall be dismissed by the Company.
Article 95 Directors shall be elected or replaced by the shareholders' meeting andmay be removed by the shareholders' meeting before the expiration of their term ofoffice. The term of office of the directors shall be three years. The directors may serveconsecutive terms if reelected upon expiration of their term of office. The term of officeof each director shall commence as of his assumption of office until the expiration ofthe current board of directors. Where the new directors fail to be promptly elected uponthe 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 seniorexecutives and directors who are employee representatives (if any) shall not exceed halfof all the directors of the Company.
Article 96 The directors shall abide by laws, administrative regulations, and theseArticles of Association and be faithful to the Company as follows:
(1) not abuse their functions and powers to accept bribery or other illegal income andnot 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 thefunds or assets of the Company;
(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 theshareholders’ meeting or the board of directors;
(5) not enter into any contract or transaction with the Company in violation of theseArticles of Association and without the approval of the shareholders’ meeting;
(6) without the approval of the shareholders' meeting, not abuse their powers andfunctions to seek business opportunities for themselves or others as should belongto the Company, nor operate for themselves or others businesses similar to those ofthe 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 beconfiscated by the Company; where the directors cause losses to the Company, theyshall bear compensation liabilities.
Article 97 The directors shall abide by the laws, administrative regulations andthese Articles of Association, and shall act with due diligence towards the Company asfollows:
(1) prudently, earnestly and diligently exercising the rights conferred by the Companyso as to ensure the compliance of the Company's business acts with the requirementsof the laws, administrative regulations and the various State economic policies andthat business activities shall not exceed the business scope mentioned in thebusiness license;
(2) treating all the shareholders fairly;
(3) promptly gaining understanding of the business, operation and managementconditions of the Company;
(4) signing written confirmation opinion to the Company's periodic report and ensuringthat the information disclosed by the Company is true, accurate and complete;
(5) providing the relevant information and materials to the board of supervisorsfaithfully, and not impeding the board of supervisors or supervisors in exercisingtheir functions and powers; and
(6) other obligations of diligence as prescribed in the relevant laws, administrativeregulations, regulations of ministries and commissions, and these Articles ofAssociation.
Article 98 Where the directors fail to attend in person two consecutive meetingsof 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 directorsshall propose a shareholders' meeting to replace such directors.
Article 99 The directors may submit the resignation in advance of expiration ofthe term of office. The directors may submit their resignation report in writing to theboard of directors to resign and the board of directors shall disclose the relevantinformation within two days thereafter.
Where the total number of members of the board of directors is lower than the minimumnumber of members required by law due to the resignation of any director, then beforethe newly elected director assumes office, the former director shall still retain theirdirectorship 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 thepreceding 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 officeexpires, his obligations to the Company and shareholders shall not be discharged beforethe resignation report comes into effect, nor be discharged within 6 months followingthe effectiveness of the resignation report or expiration of term of office, and hisobligations to the trade secrets of the Company shall survive his term of office, till thetrade secrets becomes public information. The duration of his other obligations shall bedetermined according to the principle of fairness, depending on the intervals betweenthe occurrence of the event and his resignation, and the situations and conditions underwhich the director terminates his relationship with the Company.
Article 101 Without the legal authorization by these Articles of Association or theboard of directors, no director shall represent the Company or the board of directors toact in his own name. If any director acts in his own name and further if in the reasonableopinion of a third party, such acts represent those of the Company or the board ofdirectors, the director shall declare his standpoint and identity at first.
Article 102 Where the law, administrative regulations, regulations of ministriesand commissions or these Articles of Association are violated by the directors inperforming duties for the Company, thus causing losses to the Company, the directorsshall 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 exchangeconcerned.
The Company should establish the independent director policy. The independentdirector policy should comply with laws, administrative regulations, the provisions ofthe CSRC, and the business rules of the Shenzhen Stock Exchange. The independentdirector policy should be drafted by the board of directors and approved by theshareholders' meeting. The Company should provide necessary guarantees forindependent 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 beresponsible to the shareholders' meeting.
Article 105 The board of directors shall be composed of five [5] directors, withtwo [2] independent directors therein. The board of directors shall have one boardchairman. 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 staffand workers.
Article 106 The board of directors shall exercise the following functions andpowers:
(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 theregistered capital, the issuance of bonds or other securities and the listing of theCompany;
(7) drawing up Company plans concerning major acquisitions, the acquisition of
Company stocks or merger/consolidation, spin-off, dissolution and alteration incorporate form;
(8) within the scope of authorization granted by the shareholders' meeting, deciding onsuch matters as external investment, acquisition and sale of assets, mortgage ofassets, external guarantee, entrusted management of wealth, affiliated transactionsand external donations;
(9) deciding on the establishment of the internal management organizations of theCompany;
(10) deciding on such matters as appointing or dismissing President & Chief ExecutiveOfficer and the secretary of the board of directors of the Company, as well as theirremuneration and reward/punishment; according to nominations by President &Chief Executive Officer, deciding on appointing or dismissing senior executivesincluding Chief Financial Officer, and deciding on the remuneration, reward andpunishment 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 thePresident 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 establishthe relevant specialized committees such as strategies, nomination, remuneration andappraisal, etc. where necessary. The specialized committees shall be accountable to theboard of directors, perform duties pursuant to these Articles of Association and theauthorization of the board of directors, and submit proposals to the board of directorsfor deliberation and decision. The audit committee is responsible for reviewing theCompany's financial information and its disclosure, supervising and evaluating internaland external audit work and internal control. The strategy committee is responsible forformulating the Company's long-term development strategy, conducting research onmaterial decisions, and providing recommendations to the board of directors. Thenomination committee is responsible for drafting the selection criteria and proceduresfor directors and senior executives, and for selecting and reviewing the candidates andtheir qualifications for appointment. The remuneration and appraisal committee isresponsible for formulating assessment standards for directors and senior executives,conducting assessments, and formulating and reviewing remuneration policies andplans for directors and senior executives. All members of the specialized committeesshall be directors. The independent directors shall constitute the majority of the auditcommittee, the nomination committee and the remuneration and appraisal committeeand act as the convener, and the convener of the audit committee shall be an accountingprofessional. The board of directors shall be responsible for formulation of workingprocedures for the specialized committees and standardize the operations of thespecialized committees.
Article 107 The Board of Directors shall hear the opinions of the Party Committeeof the Company before making decisions on the appointment and removal of importantpersonnel and material business and management matters of the Company.
Article 108 The board of directors of the Company shall explain to theshareholders' meeting any non-standard audit opinions on the Company's financialstatements issued by the certified public accountants.
Article 109 The board of directors shall set forth the procedural rules of the boardof 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 transactionswhich 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 havebook value and appraisal value concurrently, the higher value shall be used forcalculation;
(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 amountis more than RMB 20 million. If the assets involved in the transaction have bookvalue 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 yearexceeds 20% of the latest audited revenue of the Company, and the absolute amountis more than RMB 20 million;
(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 absoluteamount 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 morethan 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 Article41;
(8) Affiliated transaction: the affiliated transaction between the Company and affiliatednatural person exceeds RMB 300,000; the affiliated transaction between theCompany and affiliated legal person (or other organizations) exceeds RMB 3million 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 assetsof 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 financialmanagement (including bank financial products, trust products) and otherinvestment behavior identified by the Shenzhen Stock Exchange.
If any amount involved in this Article is negative amount, the absolute amount shall beused for calculation purpose.
The board of directors shall perform the duty to disclose as required by the ListingRules 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 Companyor branch manager shall conduct feasibility analysis and demonstration, and theCompany 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 afterreview and approval by the board of directors and shall be executed after theshareholders meeting approved such transaction. The shareholders meeting shall havepowers regarding transactions which meet one of the following criteria:
(1) The total amount of assets involved in the transaction exceeds 50% of the latestaudited total assets of the Company. If the assets involved in the transaction have bookvalue 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 ismore than RMB 50 million. If the assets involved in the transaction have book valueand 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 latestyear exceeds 50% of the latest audited revenue of the Company, and the absoluteamount is more than RMB 50 million;
(4) The net profit of the target of the transaction (i.e. equity interests) in the latestyear exceeds 50% of the latest audited net profit of the Company, and the absoluteamount 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 amountis more than RMB 50 million;
(6) The profit of the transaction exceeds 50% of the latest audited net profit of theCompany, and the absolute amount is more than RMB 5 million;
(7) Affiliated transaction: the affiliated transaction (except for the transactions thatthe Company receives cash as gift and the Company provides guarantee) between theCompany 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 netassets 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 totalamount of the assets or the amount of the transaction, whichever is higher, as thecalculation criteria and the amount shall be cumulative in the twelve consecutivemonths according to the type of the transaction. If the amount reaches 30% of the latestaudited total assets, the transaction shall be submitted to the shareholders’ meeting forconsideration and shall be adopted by more than two thirds of the voting rights held bythe shareholders present at the meeting.
If any amount involved in this Article is negative amount, the absolute amount shall beused for calculation purpose.
The term "transaction" as mentioned in this Article includes the following: (1) thepurchase or sale of assets (excluding the purchase of raw materials, fuel and power, andthe sale of products, commodities and other assets related to daily operations, but thepurchase and sale of such assets involved in the assets swap is still included), (2)external investment (including entrusted financial management, investment insubsidiaries, etc.); (3) providing financial support (including entrusted loans, etc.); (4)providing guarantee(including guarantee for controlled subsidiaries, etc.); (5) rentingor 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 or acquiring by transfer research and development projects; (10) signing alicense agreement; (11) waiver of rights (including without limitation waiver ofpreemptive rights or the privilege to subscribe for capital contributions); (12) othertransactions identified by the Shenzhen Stock Exchange.The external donation shall comply with the External Donation Management Measuresof ADAMA Ltd.
Article 111 The external guarantee of the Company shall comply with thefollowing 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 boardof 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, actualcontroller and their associates, the counter-guarantee from the warrantee shall berequired;
(5) If the Company or its subsidiary provides an external guarantee to a controlledsubsidiary not fully owned by the Company (directly or indirectly), the minorityshareholder of the guaranteed subsidiary shall provide a corresponding guaranteebased on its share percentage in the guaranteed subsidiary.
Article 112 The chairman of the board of directors has the following functionsand powers:
(1) presiding over the shareholders' meeting, and convening and presiding over themeeting of the board of directors;
(2) supervising and inspecting for the execution of resolutions adopted by the board ofdirectors;
(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 forcemajeure events including severe natural disasters, etc. happen, and report to theboard 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 toperform his duties, a director jointly elected by the majority of all the directors shallperform his duties.
Article 114 The board of directors shall hold at least two meetings a year whichshall be convened by the chairman of the board of directors. The board of directors shallnotify all directors, supervisors and President and CEO ten days in advance of themeeting.
Article 115 Shareholders representing more than 1/10 of the voting rights, thedirectors 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 proposeto 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 meetingof the board of directors. The Chairman of the board may propose to hold an interimmeeting 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 theinterim meeting thereof: oral or written notice; time of the notice: 2 days before themeeting.
With the unanimous consent of all the directors, the convening of the interim boardmeeting may not be restricted by the aforementioned notice time limit, provided that arecord thereof shall be made in the minutes of the board of directors and signed by allparticipating directors.
Article 117 The notice on the meeting of the board of directors shall include thefollowing:
(1) meeting date and place;
(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 isattended by the majority of all the directors. Any resolution made by the board ofdirectors 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 enterprisesmentioned in any resolution made by the board of directors, such directors shall neithervote on the said resolutions nor act as proxies for other directors to exercise their votingright upon the said resolutions. Such meetings of the board of directors may not be heldunless attended by the majority of all the non- affiliated directors, and resolutionsadopted at such meeting shall be passed by the majority of all the non-affiliateddirectors. Where the number of the non-affiliated directors attending the meeting of theboard 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 fullexpression 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 ofthe directors in person; where the directors are with good reason unable to attend themeeting, they may in writing entrust other directors to do so. The written power ofattorney shall indicate the name of each proxy, entrusted matters, scope of authorizationand validity, and shall be signed by or marked with the seal of each principal, butindependent 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 theirrights in capacity of director within the scope of authorization. Where the directors failto attend the meeting of the board of directors and further fail to entrust representativesto do so on their behalf, it shall be deemed that they have waived their voting rights atsuch meeting.
Article 122 The board of directors shall prepare minutes of its meeting in respectto matters to be examined and deliberated at such meeting, and the attending directorsshall sign such minutes.
The minutes of the meeting of the board of directors shall be kept on file at the Companyfor a period of no less than 10 years.
Article 123 The minutes of the meeting of the board of directors shall include thefollowing:
(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 areentrusted 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 CommitteeArticle 124 The Company shall establish the Party Committee. The PartyCommittee shall have one Secretary, one Vice Secretary and several committeemembers. The Chairman of the Board of Directors and the Secretary of the PartyCommittee 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 qualifiedmember of the Party Committee may act a member of the Board of Directors, Board ofSupervisors, Management though legal procedure, and the qualified Party member ofthe Board of Directors, Board of Supervisors, and Management may act as a memberof the Party committee according to relevant rules and procedures, Further, a DisciplineInspection Committee shall be established.
Article 125 The Party Committee of the Company shall perform its dutyaccording to the Charter of the CPC and the Work Regulations of the CPC, Regulationon the work at primary-level Party organizations of State-owned enterprises (for TrialImplementation) and other Party regulations.
(1) Ensure and supervise the implementation of the policies of the Party and Nation atthe Company, implement the strategic decision of the CPC Central Committee, theState Council, and the work arrangement of the Party Committee of the State-ownedAssets Supervision and Administration Commission (“SASAC”), and the higherParty organization.
(2) Insist the principle that the Party shall manage the officers, and that the Board ofDirectors shall have the right to select the managers according to the law, and thatthe managers shall have the right to select employees according to the law to beintegrated. The Party Committee shall consider the candidates nominated by theBoard of Directors or President and CEO and raise opinions, or recommendcandidates to the Board of Directors or President and CEO. The Party Committeeshall examine the candidates with the Board of Directors and raise opinions aftercollective examination.
(3) Research and discuss the stability of development and reform, materialmanagement issue, employee benefits of the Company, and raises opinions andrecommendations.
(4) Undertake the main responsibility of implementing the principle of “StrictManagement of the Party”. Take the lead of the ideological and political work ofthe Company, the United Front work, the construction of spiritual civilization, theconstruction of company culture and work of the Union, the Communist YouthLeague 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 thebudget 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 andCEO and subject to appointment or dismissal by the board of directors.
The President and CEO, Chief Financial Officer and the secretary of board of directorsshall be the senior executives of the Company.
Article 128 Circumstances concerning the disqualification of directors asprescribed in Article 94 are also applicable to the senior executives. Provisionsconcerning the duty of loyalty of directors as prescribed in Article 96 and duty of careas prescribed in Items (4), (5), (6) of Article 97 are also applicable to the seniorexecutives.
Article 129 Those persons take administrative posts, except for directors andsupervisors, in the units of the controlling shareholders of the Company, shall not serveas senior executives of the Company.
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, andPresident 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 itssubsidiaries, organizing the implementation of the resolutions adopted by the boardof directors and reporting work to the board of directors;
(2) organizing the implementation of annual business plans, debt and investments planof the Company;
(3) drafting plans for establishment of the Company's internal managementorganizations;
(4) signing documents which shall be signed by the legal representative of theCompany 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 thanthose who shall be appointed or dismissed by the board of directors;
(9) deciding on the senior executives dispatched by the Company to the controlledsubsidiaries 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 submissionto the board of directors for approval as set out in Article 110 of these Articles ofAssociation; and
(13) other functions and powers conferred by these Articles of Association or the boardof directors.
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 beprepared by the President and CEO and may not be implemented unless approved bythe board of directors.
Article 133 The work particulars applicable to the President and CEO shallinclude:
(1) conditions, procedures for holding the meeting of the President and CEO and thepeople 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 theway 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 ofoffice. The specific procedures and measures for such resignation shall be set forth inthe 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 whoshall be responsible for preparing the shareholders' meeting and the meeting of theboard of directors, keeping documents, conducting management of informationregarding 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 thelaws, administrative regulations, regulations of ministries and commissions and theseArticles of Association.
The work particulars applicable to the secretary of the board of directors shall beprepared by the Company, which includes the position, main duty and qualification,functions and powers, supervision, legal liability and resignation of the secretary of theboard of directors. The work particulars applicable to the secretary of the board ofdirectors 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 whenperforming their duties, thus causing losses to the Company, they shall be liable forcompensation according and subject to any applicable laws and regulations.
Article 138 The senior executives of the Company shall faithfully perform theirduties and act in the best interests of the Company and all shareholders. Where anysenior executive fails to perform his/her duties faithfully or breaches his/her obligationof good faith, and thereby causes damage to the Company's interests or the shareholdersof public shares, he/she shall be liable for compensation according and subject to anyapplicable law.
Chapter 8 Board of SupervisorsSection 1 Supervisors
Article 139 The circumstances mentioned under Article 94 hereunder regardingthe disqualification for directors shall also apply to the supervisors.
The directors, President and CEO and other senior executives shall not concurrently actas supervisors.
Article 140 Supervisors shall abide by the laws, administrative regulations, andthese Articles of Association and shall assume their obligation to the Company to actdutifully and diligently, shall not abuse their functions and powers to accept bribery orother illegal income, nor misappropriate Company assets.
Article 141 The term of office for each supervisor shall be three years. Thesupervisors 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 expirationof their term of office, or the resignation of supervisors within their term of office hasresulted in the number of members of the board of supervisors being lower than thenumber of members required by law, then the former supervisors shall, before the newlyelected supervisors take office, continue to perform their duties in accordance with thelaws, administrative regulations, rules and these Articles of Association.
Article 143 Supervisors shall ensure the authenticity, accuracy and completenessof information disclosed by the Company, and shall make a written confirmationopinion on periodic reports.
Article 144 Supervisors may sit on the meeting of the board of directors and raiseinquiries or recommendations on resolutions made by the board of directors.
Article 145 The supervisors shall not abuse affiliated relationship to impair theCompany's interests, and if thus having caused losses to the Company, they shall beliable for compensation.
Article 146 Where the supervisors violate the law, administrative regulations,regulations of ministries and commissions or these Articles of Association whenperforming their duties and thus cause losses to the Company, they shall be liable forcompensation.
Section 2 Board of Supervisors
Article 147 The Company shall set up a board of supervisors. The board ofsupervisors shall be composed of 3 supervisors, have one chairman and may includevice chairman(men). The chairman and vice chairman(men) of the board of supervisorsshall 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 meetingof the board of supervisors; where the chairman of the board of supervisors is unable toor fails to perform his duties, the vice chairman(men) shall convene and preside overthe meeting of the board of supervisors; where the vice chairman(men) is unable to orfails to perform his duties, a supervisor shall be chosen by more than half of all thesupervisors to convene and preside over the meeting of the board of supervisors.
The board of supervisors shall include the shareholders' representatives and anappropriate 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 ofsupervisors shall be elected by the Company's staff and workers at the meeting of therepresentatives of the staff and workers, the meeting of the staff and workers, or in anyother democratic manner.
Article 148 The board of supervisor shall exercise the following functions andpowers:
(1) examining the periodical reports of the Company as prepared by the board ofdirectors 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 bythe shareholders’ meeting;
(4) requiring directors and senior executives to rectify acts that impair the interests ofthe Company;
(5) proposing to hold the interim shareholders’ meeting, and convening and presidingover the shareholders’ meeting where the board of directors fails to fulfill suchduties 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 ofthe Company Law;
(9) may investigating upon the discovery that Company’s business is abnormal; whennecessary, may engaging professional parties including accounting firms and lawfirms, etc. to assist in their work and the expenses thereof shall be borne by theCompany.
(10) Requiring the directors, senior executives and internal audit personnel to attend themeeting of the board of supervisors and address the questions raised by the boardof supervisors; and
(11) Other powers and functions as set forth in laws, administrative regulations, rulesor these Articles of Association.
Article 149 The board of supervisors shall hold at least one meeting of the boardof supervisors every six months. The supervisors may propose to hold interim meetingsof the board of supervisors. Resolutions of the board of supervisors shall requireapproval from more than half of all the supervisors.
Article 150 The board of supervisors shall devise procedural rules for the meetingof the board of supervisors and define the discussion methods and voting procedures ofsuch meetings, so as to ensure the work efficiency and scientific decision making of theboard of supervisors.
Article 151 The board of supervisors shall record all matters under discussion andattending 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 bemade in the meeting minutes. Minutes of the meeting of the board of supervisors shallbe kept on Company file for at least 10 years.
Article 152 The notice of the meeting of the board of supervisors shall include thefollowing:
(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 AuditingSection 1 Financial and Accounting Systems
Article 153 The Company shall formulate its financial and accounting systems inaccordance with the laws, administrative regulations and the provisions of relevantState authorities.
Article 154 The Company shall submit and disclose its annual report to the CSRCand 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 stockexchange 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 relevantlaws, administrative regulations, provisions of the CSRC and the stock exchange
concerned.
Article 155 The Company shall not establish any other accounting books exceptfor the statutory ones. No assets of the Company shall be deposited in any accountopened in the name of any individual.
Article 156 When distributing each year's after-tax profits, the Company shallwithdraw 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 ofthe 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 forthe Company's losses of the previous year, profits of the current year shall be used tomake up for the losses before allocations are made for the statutory common reservefund 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,withdraw any common reserve fund from the after-tax profits.
After the Company has made up its losses and made allocations to its common reservefund, the remaining after-tax profits shall be distributed in proportion to the number ofshares held by the shareholders, unless otherwise specified by these Articles ofAssociation.
If the shareholders' meeting violates the provisions in the preceding paragraph andprofits are distributed to the shareholders before the Company makes up for losses ormakes allocations to the statutory common reserve fund, the profits distributed inviolation 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 itslosses, expand its production and operations or for conversion into additional capital ofthe Company. However, the capital reserve fund shall not be used for making up lossesof the Company.
When the statutory common reserve fund is converted to capital, the balance of suchfund 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 planfor distribution of the Company's profits, the board of directors of the Company shallcomplete the distribution of dividends (or shares) within two months from the date ofthe shareholders' meeting.
The dividends or other payment distributed to the shareholders of the domestic sharesby the Company shall be calculated and announced in RMB and paid in RMB; thedividends or other payment distributed to the shareholders of domestically listedforeign-funded shares by the Company shall be calculated and announced in RMB andpaid in Hong Kong Dollar; dividends of domestically listed foreign-funded shares maybe remitted out of China according to provision of laws and rules.
The required Hong Kong dollars regarding the dividends or other payment distributedto the shareholders of domestically listed foreign-funded shares shall be settledaccording to relevant provision of foreign exchange of China. The applicable exchangerate shall be the intermediate price of the Hong Kong Dollar in exchange to RMBannounced by the People’s Bank of China on the first working day after the resolutionof the shareholder’s meeting.
Article 159 The Policy and Decision-making Process of Distributing Profits of theCompany
(I) General principles of distributing profits of the Company
1. The Company shall fully consider the return to investors and distribute the profitsof shares to the shareholders according to the proportion of the profit available fordistribution 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 ofall 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 bededucted 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 inthe current year, the Company shall distribute the profits once a year generally. Wherethe Company's profit scale, cash flow status and demand for funds in the current periodallows, 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 andshares in combination, or other ways permitted by laws and regulations to distributeprofits.
2. The conditions and proportion of distributing cash dividends of the Company:
The Company shall distribute cash dividends if the Company is profitable and itsaccumulated undistributed profits are positive in the current year, and there are nosignificant investment plans or major cash disbursements which will affect thedistribution of profits.
The standard of the abovementioned significant investment plans or major cashdisbursements shall be construed with relevant provisions as required by the ListingRules 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 distributionof profits of the Company shall not be less than 30% of average annual profitavailable for distribution during the last three years.
3. The conditions of distributing stock dividends of the Company
Where the Company well operates and the board of directors believes that theissuance of stock dividends is beneficial to the overall interests of all shareholdersof the Company, the board of directors may, in the case of satisfying the conditionsof abovementioned cash dividends, propose a stock distribution plan for dividendof 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 supplyand demand of funds, propose a plan for the distribution of profits, and discuss thereasonableness of such plan, and the independent directors shall issue independentopinions on the profit distribution plan. The profit distribution plan shall besubmitted to the board of directors and the board of supervisors for examination,deliberation and approval, and after approved by the board of directors and theboard of supervisors, the plan shall be submitted to the shareholders' meeting forexamination and deliberation.
When examining and deliberating the profit distribution plan, the voting methodadopted by the shareholders' meeting may be online voting under specialcircumstances in addition to on-site voting.
Minority shareholders and independent directors may collect voting rightsaccording to these Articles of Association, for the full exercise of shareholders'voting rights by the shareholders. When the shareholders’ meeting examines anddeliberate the cash dividend plan, it should communicate with shareholders,
especially minority shareholders through a variety of channels, ensure thatcommunication channels are smooth, fully listen to the views and claims of minorityshareholders, and answer questions of minority shareholders promptly.
2. Where the Company is profitable and accumulated undistributed profit of theCompany of the current year is positive, but fails to propose a cash profitdistribution plan, the board of directors should make special clarifications as to thespecific reasons for not distributing cash profit, the specific use of the retainedearnings of the Company and expected return on such investment, etc., which shallbe submitted to the shareholder’s meeting for examination and deliberation afteropined on by the independent directors.
(V) Adjustment of profit distribution policy
Where, due to major changes in external business environment or its own operatingconditions, the Company does need to alter the profit distribution policy set forth in theArticles of Association. Such alteration shall be approved by the board of directors afterexamination and deliberation thereof and then submitted to the shareholders’ meetingfor examination and deliberation, and shall be approved by more than 2/3 of the votingrights of shareholders (or proxies thereof) who attend the shareholders' meeting. Theadjusted profit distribution plan shall not violate the relevant provisions of the CSRCand Shenzhen Stock Exchange. When examining and deliberating such alteration, theCompany shall provide shareholders with way of online voting.
Section 2 Internal Audit
Article 160 The Company shall implement the internal auditing system and havesuch full-time auditors to undertake internal audit and supervision over the financialincome, expenditures and the economic activities of the Company.
Article 161 The Company's internal auditing system and the duties of the auditorsshall be implemented after approved by the board of directors. The person in charge ofthe 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 SecuritiesLaw shall be engaged by the Company to render such services as the auditing ofaccounting 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 bedecided by the shareholders' meeting, and the board of directors shall not appoint theaccounting firm before the resolution is adopted by the shareholders' meeting.
Article 164 The Company shall ensure to provide the engaged accounting firmwith authentic and complete accounting evidence, accounting books, financial andaccounting 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 theshareholders' meeting.
Article 166 Where the Company dismisses or does not renew the mandate of theaccounting 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, theaccounting firm shall be permitted to state its opinions.
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 AnnouncementsSection 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 ofannouncement, upon the said announcement the notice shall be deemed to have beeneffectively served to all parties concerned.
Article 169 The notice of the shareholders' meeting held by the Company shall besent out by means of announcement.
Article 170 The notice of the meeting of the board of directors shall be sent outby means of personal delivery, mail, e-mail or fax, except as provided otherwise in thisArticle.
Article 171 The notice of the meeting of the board of supervisors shall be sent outby means of personal delivery, mail, e-mail or fax.
Article 172 Where the notice is sent out by personal delivery, it shall be deemedeffectively served on the day when the receiver signs (seals) the return receipt; whereby mail, on the fifth working days after being turned over to the post office; where bymeans of email and fax and there are evidence proving such sending out, on the day ofsending out; where by means of announcement, on the day of the first publicannouncement.
Article 173 Where the meeting notice is not sent to the person entitled to receivethe same due to any accidental omission or where no meeting notice is received by suchperson, the validity of the meeting and of any resolution adopted at the meeting shallnot be thus invalid.
Section 2 Announcement
Article 174 The Company designates China Securities Journal and SecuritiesTimes as the Chinese newspaper for release of Company's announcement anddisclosure of other information; The Company designates http://www.cninfo.com.cn asthe website for the publication of Company's announcement and disclosure of otherinformation.
Chapter 11 Merger/Consolidation, Spin-off, Capital Increase, Capital Reduction,Dissolution and LiquidationSection 1 Merger/Consolidation, Spin-off, Capital Increase and Capital Reduction
Article 175 Company mergers/consolidations may be classified into mergers orconsolidations.
Merger is where one Company merges with another Company whereby the absorbedCompany shall be dissolved. Consolidation is where at least two companies areconsolidated into a new Company whereby the consolidated parties are dissolvedrespectively.
Article 176 The merger/consolidation of companies shall require amerger/consolidation contract signed by all the merger/consolidation parties and thebalance sheet and inventory of properties shall be prepared. The Company shall within10 days from the date of the merger/consolidation resolution is made, notify its creditorsand 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 noticewithin 45 days from the date of the said announcement, ask the Company to dischargethe Company's debts or provide the relevant guarantees.
Article 177 Upon the merger/consolidation of the Company, the credit and debtsof all the relevant merger/consolidation parties shall be succeeded by the Companysurviving the said merger/consolidation or the newly-established Company.
Article 178 In the case of the spin-off of the Company, its assets shall be dividedcorrespondingly.
In the case of the spin-off of the Company, the balance sheet and the inventory ofproperties shall be prepared. The Company shall inform its creditors within 10 daysfrom the date of division resolution, and make an announcement in relevant mediaswithin 30 days.
Article 179 For the debts of the Company prior to the said spin-off, the Companyexisting thereafter shall bear the joint and several liabilities, unless otherwise specifiedin the written agreement which is concluded before the said spin-off by the Companywith its creditors on the discharge of the Company's debts.
Article 180 Where the Company needs to reduce its registered capital, it shallprepare the balance sheet and the inventory of properties.
The Company shall notify its creditors within 10 days from the date of resolution ondecrease in the registered capital and make the announcement in relevant media within30 days. The creditors shall, within 30 days from the date of the receipt of the saidnotice or if failing to receive such notice within 45 days from the date of the saidannouncement, have the right to ask the Company to discharge the Company's debts orprovide the relevant guarantees.
The registered capital after the decrease therein by the Company shall not be lower thanthe minimum amount specified by law.
Article 181 Where the Company undertakes merger/consolidation or spin-off thusaltering its registration items, it shall handle according to the law the formalities ofalteration of its registration with the Company registration authority; where theCompany is dissolved, it shall cancel its registration legally; where a new Company isestablished, it shall deal with Company establishment registration formalities inaccordance with the law.
The Company shall, if increasing or decreasing its registered capital, handle thealteration registration formalities with the Company registration authority inaccordance with the law.
Section 2 Dissolution and Liquidation
Article 182 The Company may be dissolved due to any of the followings reasons:
(1) pursuant to these Articles of Association, the operational period of the Companyhas expired or one of the other events which are grounds for dissolution hasoccurred;
(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 tothe law; or
(5) if the Company has great difficulties in business operation and management and itscontinuation may incur significant losses to the shareholders, which cannot besolved by other means, then the shareholders holding more than 10% of the votingshares of the Company may request to the people's court for dissolution of theCompany.
Article 183 The Company may survive by amending its Articles of Associationin the case of the circumstance mentioned in Item (1) of Article 182.
Any amendment hereto pursuant to the preceding paragraph shall require the approvalof more than 2/3 of the voting rights represented by the shareholders attending theshareholders' 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 liquidationproceedings. The liquidation group shall be composed of directors or the personsdecided by the shareholders' meeting. Where the liquidation group fails to beestablished within the time limit, the creditors of the Company may apply to the people'scourt, requesting the people's court to establish the liquidation group to start liquidationproceedings.
Article 184 The liquidation group shall discharge the follows duties during itsliquidation:
(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 theliquidating;
(4) making full payment of taxes owed and taxes imposed during the process ofliquidation;
(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 fromthe date of its establishment and make the announcement within 60 days in newspaperappointed by the CSRC. The creditors shall, within 30 days from the date of the receiptof the said notice, or if failing to receive such notice, within 45 days from the date ofthe said announcement, declare their creditors' rights to the liquidation group.
When reporting claims, the creditors shall explain matters relevant to their claims andshall provide evidentiary materials. The liquidation group shall register creditor'sclaims.
During the declaration of the creditor's claims, the liquidation group shall not dischargethe 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 theliquidation plan and submit it to the shareholders' meeting or the people's court forconfirmation.
The portion of the Company's properties remaining after they are used to pay for theliquidation expense, salary of the staff and workers, social insurance expense, statutorycompensation, and the taxes and debts in arrears, shall be distributed by the Companyin proportions to shares held by the shareholders.
The Company shall, during the liquidation period, remain in existence, but shall notcarry out activities irrelevant to the liquidation. The Company's properties, before theyare 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 thebalance sheet and the inventory of properties, the liquidation group discovers that theCompany's properties are insufficient to repay the Company's debts, it shall apply forbankruptcy to the people's court.
After the Company is declared bankrupt by ruling of the people's court, the liquidationgroup shall transfer liquidation matters to the people's court.
Article 188 After the completion of the liquidation, the liquidation group shalldevise a liquidation report and submit it to the shareholders' meeting or the people'scourt for confirmation and also to the Company registration authority for cancellationof 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 andfulfill their liquidation obligations in accordance with the law.
Members of the liquidation group shall not abuse their powers to accept bribery or anyother illegal income, nor misappropriate the Company's properties.
Where members of the liquidation group incur losses to the Company or the creditorsthereof intentionally or due to gross negligence, they shall be liable to compensation.
Article 190 Where the Company is lawfully declared bankrupt, it shall carry outbankruptcy liquidation in accordance with laws concerning the bankruptcy ofenterprises.
Chapter 12 Amendments to the Articles of Association
Article 191 The Company shall amend these Articles of Association in any of thefollowing 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 conflictwith 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 mattersrecorded in the Company's Articles of Association; or
(3) any amendment to the Articles of Association of the Company is decided by theshareholders' meeting.
Article 192 Where any amendment to the Articles of Association of the Companyas passed by resolution of the shareholders' meeting requires the examination andapproval of the competent authority, such amendment shall be submitted to thecompetent authority for approval; where registration matters are involved, theformalities of amending registration shall be handled according to the law.
Article 193 The board of directors shall amend these Articles of Association inaccordance with the resolutions adopted by the shareholders' meeting on amendment tothe Company's Articles of Association and pursuant to the approval opinions of thecompetent authority.
Article 194 Where any amendment to these Articles of Association is related toinformation required by laws and regulations to be disclosed, such amendment shall beannounced in accordance with the relevant provisions.
Chapter 13 Supplementary Provisions
Article 195 Definitions
(1) The "controlling shareholders" shall refer to the shareholders whose holdings ofshares account for more than 50% of the total shares in the Company; orshareholders who hold less than 50% of the total shares in the Company but whoseshares can represent such voting rights as sufficient to greatly affect the resolutionsmade 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'scontrolling shareholders, actual controllers, directors, supervisors, seniorexecutives, and enterprises directly or indirectly under their control, as well as anyother 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 ofAssociation, formulate detailed rules for implementation of these Articles ofAssociation which shall not go against the provisions thereof.
Article 197 These Articles of Association shall be written in Chinese. Where aversion in any other language or a different version is in conflict with these Articles ofAssociation, the most recently approved Chinese version as registered with MarketRegulation Administration of Hubei Province shall prevail.
Article 198 Such terms as "no less than", "within" and "no more than" used inthese 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 givenfigures.
Article 199 These Articles of Association shall be interpreted by the board ofdirectors of the Company.
Article 200 Any appendix to these Articles of Association shall include theprocedural rules of the shareholders' meeting, the meeting of the board of directors andthe meeting of the board of supervisors respectively.
Article 201 These Articles of Association shall come into effect on the date ofresolution of shareholder’s meeting thereof.
ADAMA Ltd.