Shanghai Lily&Beauty Cosmetics Co.Ltd(605136)
Code of conduct for controlling shareholders and actual controllers
Chapter I General Provisions
Article 1 in order to further regulate the acts of the controlling shareholders and actual controllers of Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) (“the company”) and protect the rights and interests of the majority of shareholders, especially the minority shareholders, from damage, according to the company law of the people’s Republic of China, the securities law of the people’s Republic of China and the stock listing rules of Shanghai Stock Exchange This standard is formulated in accordance with the self regulatory guidelines for listed companies of Shanghai Stock Exchange No. 1 – standardized operation and other laws, administrative regulations, rules and normative documents, as well as the relevant provisions of Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) articles of Association (hereinafter referred to as the “articles of association”).
Article 2 the term “controlling shareholder” as mentioned in these specifications refers to the shareholder who holds more than 50% of the total share capital of the company, or the shareholder who holds less than 50% of the shares but has enough voting rights to have a significant impact on the resolutions of the general meeting of shareholders.
Article 3 the term “actual controller” in these specifications refers to the natural person, legal person or other organization that can actually control and influence the company’s behavior through investment relationship, agreement or other arrangements.
Article 4 the acts of the following subjects shall be regarded as the acts of controlling shareholders and actual controllers, and the relevant provisions of this code shall apply:
(I) legal persons and unincorporated organizations directly or indirectly controlled by controlling shareholders and actual controllers (except the company and its holding subsidiaries);
(II) if the controlling shareholder or actual controller is a natural person, his spouse, parents and children;
(III) the largest shareholder;
(IV) other entities recognized by Shanghai Stock Exchange.
Article 5 the controlling shareholders, actual controllers and relevant personnel of the company shall abide by the provisions of relevant laws and regulations of the securities market, promote the standardized operation of the company and improve the quality of the company.
Article 6 the controlling shareholders and actual controllers of the company shall abide by the principle of good faith, exercise their rights in good faith in accordance with the provisions of laws, regulations and the articles of association, strictly perform the obligations of shareholders and their commitments, seek the common development of the interests of the company and all shareholders, and shall not conceal the identity of their controlling shareholders and actual controllers and evade relevant obligations and responsibilities.
Article 7 the controlling shareholders and actual controllers of the company shall maintain the independence of the company and shall not abuse the rights of shareholders, control the company for illegal interests, occupy the company’s funds and other resources, damage the legitimate rights and interests of the company and other shareholders or seek illegal interests. It shall not prevent the company or relevant information disclosure obligors from disclosing information, nor organize or instruct the company or relevant information disclosure obligors to engage in illegal acts of information disclosure. Article 8 the controlling shareholders and actual controllers of the company shall perform the following duties:
(I) abide by and urge the company to abide by laws and regulations, relevant provisions of the stock exchange and the articles of Association; (II) exercise shareholders’ rights in accordance with the law and do not abuse the right of control to damage the legitimate rights and interests of the company or other shareholders; (III) strictly implement the public statements and commitments made, and do not change or cancel without authorization;
(IV) perform the obligation of information disclosure in strict accordance with relevant regulations;
(V) the company’s funds shall not be illegally occupied in any way;
(VI) it is not allowed to force, instigate or require listed companies and relevant personnel to provide guarantees in violation of laws and regulations; (VII) not to use the company’s unpublished material information for profit, not to disclose the unpublished material information related to the company in any way, and not to engage in insider trading, short-term trading, market manipulation and other illegal acts;
(VIII) the legitimate rights and interests of the company and other shareholders shall not be damaged by unfair related party transactions, profit distribution, asset restructuring, foreign investment and other means;
(IX) ensure the integrity of the company’s assets, personnel independence, financial independence, institutional independence and business independence, and shall not affect the independence of the company in any way;
(x) other duties that the Shanghai Stock Exchange and the company think should be performed.
Chapter II corporate governance
Article 9 the controlling shareholders and actual controllers shall establish a system to clarify the decision-making procedures for major matters of the company and the specific measures to ensure the independence of the company, and establish the responsibilities, authorities and accountability mechanism of relevant personnel in the relevant work of the company.
Article 10 the controlling shareholders and actual controllers shall maintain the integrity of the company’s assets and shall not infringe on the company’s rights to occupy, use, benefit and dispose of its legal person’s property.
(I) the controlling shareholder and the actual controller shall timely handle the transfer procedures of the assets invested or transferred to the company in accordance with the legal provisions and the contract;
(II) the controlling shareholder and actual controller shall not affect the integrity of the company’s assets in the following ways: 1. Share with the company the production system, auxiliary production system and supporting facilities related to production and operation, as well as the business system related to operation and related assets;
2. Share trademarks, patents and non patented technologies with the company in a way that is obviously unfair;
3. Occupy, use, gain or dispose of the company’s assets free of charge or under obviously unfair conditions;
4. Other circumstances stipulated or recognized by laws and regulations, relevant provisions of Shanghai Stock Exchange.
Article 11 the controlling shareholders and actual controllers shall maintain the independence of the company’s personnel and shall not affect the independence of the company’s personnel in the following ways:
(I) influence the appointment and removal of the company’s personnel or restrict the performance of duties of the company’s directors, supervisors, senior managers and other personnel serving in the company by means other than exercising the rights of shareholders specified in relevant laws and regulations and the articles of Association;
(II) appoint the general manager, the Secretary of the board of directors, the deputy general manager and the person in charge of finance of the company to hold business management positions other than directors and supervisors in the controlling shareholders, actual controllers and enterprises under their control;
(III) require the company’s personnel to provide services free of charge;
(IV) make the company’s directors, supervisors, senior managers and other personnel working in the company make decisions or acts that harm the interests of the company;
(V) other circumstances stipulated or recognized by laws and regulations, relevant provisions of Shanghai Stock Exchange.
Article 12 the controlling shareholders and actual controllers shall maintain the financial independence of the company and shall not affect the financial independence of the company in the following ways:
(I) share bank accounts with the company or borrow financial accounts such as the company’s bank accounts, or deposit the company’s funds into the accounts controlled by the controlling shareholders, actual controllers and their affiliates in any way;
(II) non operating occupation of the company’s funds by various means;
(III) require the company to provide guarantee in violation of laws and regulations;
(IV) incorporate the company’s financial accounting system into the management system of controlling shareholders and actual controllers, such as sharing the financial accounting system or the controlling shareholders and actual controllers can directly query the company’s operation, financial status and other information through the financial accounting system;;
(V) other circumstances stipulated or recognized by laws and regulations, relevant provisions of Shanghai Stock Exchange.
Article 13 controlling shareholders, actual controllers and other related persons shall not occupy the company’s funds in the following ways:
(I) require the company to advance and bear wages, welfare, insurance, advertising and other expenses, costs and other expenses;
(II) require the company to borrow funds for its use (including entrusted loans) with compensation or free of charge, directly or indirectly;
(III) require the company to entrust it to carry out investment activities;
(IV) require the company to issue commercial acceptance bills without real transaction background, and provide funds in the form of purchase payment, asset transfer payment, advance payment, etc. when there is no consideration for goods and services or when it is obviously contrary to business logic;
(V) require the company to repay its debts on its behalf;
(VI) other circumstances stipulated or recognized by laws and regulations, relevant provisions of Shanghai Stock Exchange.
Controlling shareholders, actual controllers and other related persons shall not occupy the company’s funds in the form of “occupation during the period and return at the end of the period” or “small amount and multiple batches”.
Article 14 If the controlling shareholders and actual controllers provide daily financial services to the company through their subordinate financial companies (hereinafter referred to as “financial companies”), they shall, in accordance with laws and regulations and relevant provisions of Shanghai Stock Exchange, urge the financial companies and relevant parties to cooperate with the company to fulfill the decision-making procedures and information disclosure obligations of related party transactions, and supervise the standardized operation of the financial companies, Ensure the safety of the company’s funds stored in the finance company, and do not use the dominant position to force the company to accept the services of the finance company.
Article 15 the controlling shareholders and actual controllers shall maintain the independence of the company’s institutions, and shall support the directors of the company to intervene in the establishment, adjustment or cancellation of the company’s institutions in ways other than the shareholders’ rights stipulated in the relevant laws and regulations and the articles of association, or restrict or exert other improper influence on the exercise of functions and powers of the board of directors, the board of supervisors, other institutions and their personnel.
Article 16 the controlling shareholders and actual controllers shall maintain the business independence of the company.
(I) the controlling shareholder and actual controller shall support and cooperate with the company to establish an independent production and operation mode, and shall not compete with the company in terms of business scope, business nature, customer object, product substitutability, etc., which may damage the interests of the company. The controlling shareholders and actual controllers shall take measures to avoid or eliminate horizontal competition with the company;
(II) the controlling shareholder and actual controller shall maintain the company’s independent decision-making in production and operation, internal management, external investment, external guarantee and other aspects, support and cooperate with the company to perform the internal decision-making procedures for major matters according to law, and exercise the shareholders’ rights specified in relevant laws and regulations such as proposal right and voting right and the articles of association, Participate in the decision-making of major matters of the company through the general meeting of shareholders;
(III) the controlling shareholders and actual controllers shall not take advantage of their control over the company to seek business opportunities belonging to the company.
Article 17 the controlling shareholders and actual controllers shall maintain the company’s independent decision-making in providing guarantees, support and cooperate with the company to perform the internal decision-making procedures and information disclosure obligations of external guarantees in accordance with laws and regulations, and shall not force, instigate or require the company and relevant personnel to provide guarantees in violation of regulations.
If the controlling shareholder or actual controller forces, instructs or requires the company to engage in illegal guarantee acts, the company and its directors, supervisors and senior managers shall refuse, and shall not assist, cooperate or acquiesce.
Article 18 in case of related party transactions between the controlling shareholders and actual controllers and the company, they shall follow the principles of procedural fairness and substantive fairness of related party transactions, and sign a written agreement, which shall not cause the company to transfer their interests. The company shall not be required to conduct obviously unfair related party transactions with it, shall not be required to provide goods, services or other assets for the company free of charge or under obviously unfair conditions, shall not influence the independent decision-making of the company in any way, and shall not damage the company and minority shareholders through fraud, false statement or other improper acts
Article 19 the profits of the listed company, the controlling shareholders, the controlling shareholders and the actual assets of the listed company shall not be encroached upon, or the interests of the controlling shareholders and other related parties shall not be infringed upon through direct investment, reorganization or other indirect means.
Chapter III Information Disclosure
Article 20 the controlling shareholders and actual controllers shall perform the obligation of information disclosure in strict accordance with relevant provisions, and ensure that the information disclosed is timely, fair, true, accurate and complete, without false records, misleading statements or major omissions. If the controlling shareholder or actual controller receives the inquiry from the company, he shall timely understand the situation and reply to ensure that the reply is true, accurate and complete.
Article 21 the controlling shareholders and actual controllers shall specify at least the following contents in the relevant systems:
(I) scope of major information related to the company;
(II) reporting process of undisclosed major information;
(III) Insider registration system;
(IV) confidentiality measures for undisclosed major information;
(V) the process of releasing information;
(VI) procedures for cooperating with the company’s information disclosure;
(VII) responsibilities and authorities of relevant personnel in information disclosure affairs;
(VIII) other information disclosure management systems.
Article 22 the controlling shareholder and the actual controller shall designate relevant departments and personnel to be responsible for information disclosure and timely inform the company of the contact information of relevant departments and personnel.
The controlling shareholders and actual controllers shall cooperate with the company’s information disclosure and insider registration, timely respond to the company’s inquiries, and ensure the authenticity, accuracy and completeness of the information and materials provided.
The controlling shareholders and actual controllers shall cooperate with the Shanghai Stock Exchange and the company to complete the inquiry, investigation and verification related to information disclosure. If they receive the written confirmation letter of the company, they shall timely understand the true situation from the relevant parties, reply in writing within the time limit, and provide relevant supporting materials to ensure the authenticity, accuracy and completeness of relevant information and materials.
Article 23 in case of any of the following circumstances, the controlling shareholder or actual controller shall notify the company in writing on the day of the event and cooperate with the company’s information disclosure:
(I) the situation of holding shares or controlling the company has changed greatly, and the situation of the actual controller of the company and other enterprises under its control engaged in the same or similar business as the company has changed greatly;
(II) the court has ruled to prohibit the transfer of its shares, and more than 5% of its shares have been pledged, frozen, judicially marked, judicially auctioned, entrusted, set up trust or restricted voting rights according to law, or there is a risk of compulsory transfer of ownership;
(III) propose to carry out major asset reorganization, debt reorganization or business reorganization of the company;
(IV) entering bankruptcy or dissolution proceedings due to the deterioration of business conditions;
(V) there are rumors related to the controlling shareholder and actual controller, which may have a great impact on the trading price of the company’s shares and their derivatives;
(VI) being subject to criminal punishment, being suspected of violating laws and regulations, being filed for investigation by the CSRC, being subject to administrative punishment by the CSRC, or being subject to major administrative punishment by other competent authorities;
(VII) being suspected of serious violation of discipline and law or job-related crime, and being detained by the discipline inspection and supervision organ, which affects his performance of duties;
(VIII) being suspected of committing a crime and being taken compulsory measures;
(IX) other events that may have a great impact on the trading price of the company’s securities and their derivatives. Occurrence of events in the preceding paragraph
