Hengdian Group Dmegc Magnetics Co.Ltd(002056)
Rules of procedure of the general meeting of shareholders
Chapter I General Provisions
Article 1 in order to regulate the behavior of Hengdian Group Dmegc Magnetics Co.Ltd(002056) (hereinafter referred to as “the company”) and ensure that the general meeting of shareholders exercises its functions and powers according to law, in accordance with the company law of the people’s Republic of China (hereinafter referred to as “the company law”), the securities law of the people’s Republic of China (hereinafter referred to as “the securities law”), the rules of the general meeting of shareholders of listed companies, and the standards for the governance of listed companies These rules are formulated in accordance with the provisions of relevant laws, administrative laws and regulations, normative documents and the articles of association, such as the Listing Rules of Shenzhen Stock Exchange (hereinafter referred to as the Listing Rules), the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – Guidelines for the standardized operation of listed companies on the main board (hereinafter referred to as the standardized operation), etc.
Article 2 the company shall hold the general meeting of shareholders in strict accordance with the relevant provisions of laws, administrative regulations and the articles of association to ensure that shareholders can exercise their rights according to law.
The board of directors of the company shall earnestly perform its duties and seriously and timely organize the general meeting of shareholders. All directors of the company shall be diligent and responsible to ensure the normal convening of the general meeting of shareholders and exercise their functions and powers according to law.
Article 3 the general meeting of shareholders shall exercise its functions and powers within the scope specified in the company law and the articles of association. Article 4 the general meeting of shareholders is divided into annual general meeting and extraordinary general meeting. The annual general meeting of shareholders shall be held once a year and shall be held within six months after the end of the previous fiscal year. The extraordinary general meeting of shareholders shall be held irregularly. Under any of the following circumstances, the company shall convene the extraordinary general meeting of shareholders within two months from the date of occurrence:
(I) the number of directors is less than two-thirds of the number specified in the company law or the articles of Association;
(II) when the company’s outstanding losses reach one-third of the total paid in share capital;
(III) at the request of shareholders who individually or jointly hold more than 10% of the shares of the listed company;
(IV) when the board of directors deems it necessary;
(V) the proposal of independent directors and the consent of more than half of all independent directors;
(VI) when the board of supervisors proposes to hold a meeting;
(VII) other circumstances stipulated by laws, administrative regulations, departmental rules, articles of association or these rules. If the company is unable to convene the general meeting of shareholders within the above-mentioned period, it shall report to the Zhejiang regulatory bureau of China Securities Regulatory Commission (hereinafter referred to as “Zhejiang securities regulatory bureau”) and Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”), explain the reasons and make an announcement.
Article 5 when convening a general meeting of shareholders, the company shall hire a lawyer to give legal opinions on the following issues and make a public announcement: (I) whether the convening and convening procedures of the meeting comply with the provisions of laws, administrative regulations, the articles of association and these rules of procedure;
(II) whether the qualifications of the participants and the convener are legal and valid;
(III) whether the voting procedures and results of the meeting are legal and valid;
(IV) legal opinions on other relevant issues at the request of the company.
Chapter II functions and powers of the general meeting of shareholders
Article 6 the general meeting of shareholders is the highest authority of the company and exercises the following functions and powers according to law:
(I) determine the company’s business policy and investment plan;
(II) elect and replace directors and supervisors who are not staff representatives, and decide on the remuneration of directors and supervisors;
(III) review and approve the report of the board of directors;
(IV) review and approve the report of the board of supervisors;
(V) review and approve the company’s annual financial budget plan and final account plan;
(VI) review and approve the company’s profit distribution plan and loss recovery plan;
(VII) make resolutions on the increase or decrease of the company’s registered capital;
(VIII) make resolutions on the issuance of shares, bonds and convertible bonds by the company;
(IX) make resolutions on the merger, division, dissolution, liquidation or change of corporate form of the company;
(x) amend the articles of Association;
（11） Make resolutions on the employment and dismissal of accounting firms by the company;
（12） Review and approve the guarantee matters specified in Article 7;
（13） To review the purchase and sale of major assets by the company within one year that exceed 30% of the company’s total audited assets in the latest period;
（14） Review the related party transactions between the company and related natural persons with a transaction amount of more than 3 million yuan and between the company and related legal persons with a transaction amount of more than 30 million yuan and accounting for more than 5% of the company’s latest audited net assets;
（15） Review and approve the change of the purpose of the raised funds;
（16） Review the equity incentive plan and employee stock ownership plan;
（17） Other matters stipulated in the articles of association, administrative regulations or the articles of association shall be deliberated by the shareholders’ meeting.
The functions and powers of the above general meeting of shareholders shall not be exercised by the board of directors or other institutions and individuals in the form of authorization.
Article 7 the following external guarantees of the company shall be examined and approved by the general meeting of shareholders:
(I) any guarantee provided after the total amount of external guarantee of the company and its holding subsidiaries exceeds 50% of the latest audited net assets;
(II) any guarantee provided after the total amount of external guarantee of the company exceeds 30% of the total assets audited in the latest period;
(III) the guarantee provided for the guarantee object whose asset liability ratio exceeds 70%;
(IV) the amount of a single guarantee exceeds 10% of the latest audited net assets;
(V) the company’s total guarantee amount in the last 12 months exceeds 30% of the company’s total assets audited in the latest period;
(VI) guarantees provided to shareholders, actual controllers and their related parties;
(VII) other guarantees stipulated by Shenzhen Stock Exchange or the articles of association.
When the general meeting of shareholders deliberates the guarantee matters in Item (V) of the preceding paragraph, it shall be approved by more than two-thirds of the voting rights held by the shareholders attending the meeting.
When the general meeting of shareholders deliberates the guarantee proposal provided for shareholders, actual controllers and their related parties, the shareholders or shareholders controlled by the actual controllers shall not participate in the voting, which shall be adopted by more than half of the voting rights held by other shareholders attending the general meeting of shareholders.
Chapter III convening of the general meeting of shareholders
Article 8 the board of directors shall convene the general meeting of shareholders on time within the time limit specified in Article 4 of these rules.
Article 9 independent directors have the right to propose to the board of directors to convene an extraordinary general meeting of shareholders. For the proposal of independent directors to convene an extraordinary general meeting of shareholders, the board of directors shall, in accordance with the provisions of laws, administrative regulations and the articles of association, give written feedback on whether to agree or disagree to convene an extraordinary general meeting of shareholders within 10 days after receiving the proposal.
If the board of directors agrees to convene an extraordinary general meeting of shareholders, it shall issue a notice of convening the general meeting of shareholders within five days after the resolution of the board of directors is made; If the board of directors does not agree to convene an extraordinary general meeting of shareholders, it shall explain the reasons and make a public announcement.
Article 10 the board of supervisors has the right to propose to the board of directors to convene an extraordinary general meeting of shareholders, which shall be submitted to the board of directors in writing. The board of directors shall, in accordance with the provisions of laws, administrative regulations and the articles of association, give written feedback on whether it agrees or disagrees with the convening of the extraordinary general meeting of shareholders within 10 days after receiving the proposal.
If the board of directors agrees to convene an extraordinary general meeting of shareholders, it shall issue a notice of convening the general meeting of shareholders within five days after the resolution of the board of directors is made. Any change to the original proposal in the notice shall be approved by the board of supervisors.
If the board of directors disagrees with the convening of the extraordinary general meeting of shareholders, or fails to give written feedback within 10 days after receiving the proposal, it shall be deemed that the board of directors is unable to perform or fails to perform its duty of convening the general meeting of shareholders, and the board of supervisors may convene and preside over it by itself.
Article 11 shareholders who individually or jointly hold more than 10% of the company’s shares have the right to request the board of directors to convene an extraordinary general meeting of shareholders, and shall submit it to the board of directors in writing. The board of directors shall, in accordance with the provisions of laws, administrative regulations and the articles of association, give written feedback on whether to agree or disagree to convene the extraordinary general meeting of shareholders within 10 days after receiving the request.
If the board of directors agrees to convene an extraordinary general meeting of shareholders, it shall issue a notice of convening the general meeting of shareholders within five days after the resolution of the board of directors is made. Any change to the original request in the notice shall be approved by the relevant shareholders.
If the board of directors does not agree to convene the extraordinary general meeting of shareholders, or fails to give feedback within 10 days after receiving the request, the shareholders who individually or jointly hold more than 10% of the company’s shares have the right to propose to the board of supervisors to convene the extraordinary general meeting of shareholders, and shall submit a request to the board of supervisors in writing.
If the board of supervisors agrees to convene an extraordinary general meeting of shareholders, it shall issue a notice of convening the general meeting of shareholders within five days after receiving the request. Any change to the original request in the notice shall be approved by the relevant shareholders.
If the board of supervisors fails to issue the notice of the general meeting of shareholders within the specified time limit, it shall be deemed that the board of supervisors does not convene and preside over the general meeting of shareholders. Shareholders who individually or jointly hold more than 10% of the shares of the company for more than 90 consecutive days may convene and preside over the general meeting of shareholders by themselves.
Article 12 Where the board of supervisors or shareholders decide to convene the general meeting of shareholders on their own, they shall notify the board of directors in writing and report to the Shenzhen stock exchange for the record.
Before the announcement of the resolution of the general meeting of shareholders, the shareholding ratio of the convening shareholders shall not be less than 10%. The convening shareholders shall promise not to reduce their shares of the company from the date of proposing to convene the general meeting of shareholders to the date of convening the general meeting of shareholders and disclose them no later than the time of issuing the notice of the general meeting of shareholders.
The board of supervisors or convening shareholders shall submit relevant supporting materials to the Shenzhen Stock Exchange when issuing the notice of the general meeting of shareholders and the announcement of the resolution of the general meeting of shareholders.
Article 13 the board of directors and the Secretary of the board of directors will cooperate with the general meeting of shareholders convened by the board of supervisors or shareholders. The board of directors will provide the register of shareholders on the equity registration date. If the board of directors fails to provide the register of shareholders on the equity registration date, the convener may apply to the securities registration and clearing institution for obtaining the relevant notice of convening the general meeting of shareholders. The register of shareholders obtained by the convener shall not be used for any purpose other than convening the general meeting of shareholders.
Article 14 the expenses necessary for the shareholders’ meeting convened by the board of supervisors or shareholders shall be borne by the company.
Chapter IV proposal and notice of shareholders’ meeting
Article 15 the contents of the proposal shall fall within the scope of the functions and powers of the general meeting of shareholders, have clear topics and specific resolutions, and comply with the relevant provisions of laws, administrative regulations and the articles of association.
Article 16 shareholders who individually or jointly hold more than 3% of the company’s shares may put forward interim proposals and submit them to the convener in writing 10 days before the shareholders’ meeting. The convener shall issue a supplementary notice of the general meeting of shareholders within two days after receiving the proposal and announce the contents of the interim proposal.
Except for the circumstances specified in the preceding paragraph, after issuing the notice and announcement of the general meeting of shareholders, the convener shall not modify the proposals listed in the notice of the general meeting of shareholders or add new proposals.
For proposals that are not listed in the notice of the general meeting of shareholders or do not comply with the provisions of Article 15 of these rules, the general meeting of shareholders shall not vote and make resolutions.
Article 17 the convener shall notify all shareholders in the form of announcement 20 days before the annual shareholders’ meeting is held, and the extraordinary shareholders’ meeting shall notify all shareholders in the form of announcement 15 days before the meeting is held. The time limit of the meeting is not included in the calculation of the starting date of the meeting of the company.
Article 18 the notice and supplementary notice of the general meeting of shareholders shall fully and completely disclose the specific contents of all proposals. If the matters to be discussed need the opinions of independent directors and intermediaries, the relevant opinions and reasons will be disclosed at the same time when the notice or supplementary notice of the general meeting of shareholders is issued.
Article 19 Where the general meeting of shareholders intends to discuss the election of directors and supervisors, the notice of the general meeting of shareholders shall fully disclose the details of the candidates for directors and supervisors, including at least the following contents:
(I) education background, work experience, working experience, part-time job and other personal information;
(II) whether it is related to shareholders holding more than 5% of the company’s shares, actual controllers, other directors, supervisors and senior managers of the company;
(III) disclose the number of shares held by the company;
(IV) whether they have been punished by the CSRC and other relevant departments and the stock exchange;
In addition to adopting the cumulative voting system to elect directors and supervisors, each candidate for directors and supervisors shall be proposed in a single proposal.
Article 20 the notice of the shareholders’ meeting shall specify the time and place of the meeting and determine the date of equity registration. The interval between the date of equity registration and the date of the meeting shall not be more than seven working days. Once the equity registration date is confirmed, it shall not be changed.
Article 21 after the notice of the general meeting of shareholders is issued, the general meeting of shareholders shall not be postponed or cancelled without justified reasons, and the proposals listed in the notice of the general meeting of shareholders shall not be cancelled. In case of delay or cancellation, the convener shall make an announcement at least two working days before the original date of the meeting and explain the reasons.
Chapter V convening of the general meeting of shareholders
Article 22 the company shall be located at the domicile of the company or the specific place listed in the notice of the general meeting of shareholders of the company. The general meeting of shareholders shall be held in the form of on-site meeting, and shall adopt safe, economic and convenient networks and other ways to facilitate shareholders’ participation in the general meeting of shareholders in accordance with laws, administrative regulations, CSRC or the articles of association. If a shareholder attends the general meeting of shareholders in the above ways, he shall be deemed to be present.
Shareholders may attend the shareholders’ meeting in person and exercise their voting rights, or entrust others to attend and exercise their voting rights within the scope of authorization.
Article 23 If the general meeting of shareholders adopts network or other means, the voting time and voting procedures of network or other means shall be clearly stated in the notice of the general meeting of shareholders.
The starting time of online voting or other means of voting at the general meeting of shareholders shall not be earlier than 3:00 p.m. on the day before the on-site general meeting of shareholders, and shall not be later than 9:30 a.m. on the day when the on-site general meeting of shareholders is held, and its ending time shall not be earlier than 3:00 p.m. on the day when the on-site general meeting of shareholders ends.
Article 24 the board of directors and other conveners shall take necessary measures to ensure the normal order of the general meeting of shareholders. Measures shall be taken to stop the acts of interfering with the general meeting of shareholders, making trouble and infringing upon the legitimate rights and interests of shareholders, and timely report to relevant departments for investigation and punishment.
Article 25 all shareholders or their agents registered on the equity registration date shall have the right to attend the general meeting of shareholders, and the company and the convener shall not refuse for any reason.
Article 26 individual shareholders present in person
