Hengdian Entertainment Co.Ltd(603103)
Shareholder return planning for the next three years (20222024)
In order to standardize Hengdian Entertainment Co.Ltd(603103) (hereinafter referred to as “the company”), establish a scientific, sustainable and stable shareholder return mechanism, increase the transparency and operability of profit distribution policy decision-making, actively repay investors and effectively protect the legitimate rights and interests of small and medium-sized investors, according to the company law of the people’s Republic of China The notice on further implementing matters related to cash dividends of listed companies, the guidelines for the supervision of listed companies No. 3 – cash dividends of listed companies (revised in 2022) and other relevant laws, regulations and normative documents issued by the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”) and the relevant provisions of the articles of association, Formulate the shareholder return plan for the next three years (20222024) (hereinafter referred to as the “plan”).
Article 1 factors considered by the company in formulating this plan
The company focuses on long-term and sustainable development, comprehensively considers the actual situation and development objectives of the company, and establishes a sustainable, stable and scientific return planning and mechanism for investors, so as to make institutional arrangements for profit distribution, so as to ensure the continuity and stability of profit distribution policy.
Article 2 formulation principles of this plan
When formulating the shareholder return plan, the company shall fully consider and listen to the opinions of shareholders (especially small and medium-sized investors), independent directors and the board of supervisors. On the premise of paying attention to the reasonable investment return to investors and taking into account the sustainable development of the company, the company shall implement a continuous, stable and preferential profit distribution policy of cash dividends.
Article 3 specific shareholder return plan of the company in the next three years (20222024)
(I) the company distributes dividends in cash, stock, combination of cash and stock, or other ways permitted by laws and regulations; Under the conditions of cash dividend, the company shall give priority to cash dividend for profit distribution.
(II) in principle, the company conducts annual profit distribution once a year, and the company can conduct medium-term profit distribution according to the company’s profit and capital demand.
(III) the specific conditions for the company to distribute dividends in cash are as follows:
(1) The company’s current year profit and accumulated undistributed profit are positive;
(2) The audit institution shall issue a standard unqualified audit report on the annual financial report of the company;
(3) The company has no major investment plan or major cash expenditure (except for investment projects with raised funds). Major investment plan or major cash expenditure refers to:
① In the next 12 months, the cumulative expenditure of the company’s proposed foreign investment or acquisition of assets reaches or exceeds 20% of the company’s latest audited net assets and exceeds RMB 100 million.
② The company plans to invest abroad, acquire assets or purchase equipment within the next 12 months, and the cumulative expenditure reaches or exceeds 10% of the company’s latest audited total assets.
The annual profit distributed by the company in cash shall not be less than 10% of the distributable profit realized in the current year, and the cumulative profit distributed in cash in the recent three years shall not be less than 30% of the annual distributable profit realized in the three years. Under the condition that the company has real and reasonable factors such as growth and dilution of net assets per share, the company can distribute profits by means of stock dividend.
(IV) conditions for the company to issue stock dividends: when the company meets the above cash dividend regulations, has real and reasonable factors such as the company’s growth, dilution of net assets per share, capital stock scale and equity structure, and the issuance of stock dividends is conducive to the overall interests of all shareholders of the company, the board of directors may propose a stock dividend distribution plan in addition to the implementation of the above cash dividends, And submit it to the general meeting of shareholders for deliberation.
(V) the board of directors of the company shall comprehensively consider the characteristics of the company’s industry, development stage, its own business model, profitability and whether there are major capital expenditure arrangements, distinguish the following situations, and put forward differentiated cash bonus policies in accordance with the procedures specified in the articles of association:
(1) If the development stage of the company is mature and there is no major capital expenditure arrangement, the proportion of cash dividends in this profit distribution shall reach 80% at least;
(2) If the development stage of the company is mature and there are major capital expenditure arrangements, the proportion of cash dividends in this profit distribution shall reach 40% at least;
(3) If the development stage of the company is in the growth stage and there are major capital expenditure arrangements, when making profit distribution, the proportion of cash dividends in this profit distribution shall be at least 20%;
If the development stage of the company is not easy to distinguish, but there are major capital expenditure arrangements, it can be handled in accordance with the provisions of the preceding paragraph. The proportion of cash dividends in this profit distribution is the sum of cash dividends divided by cash dividends and stock dividends.
(VI) the annual profit distribution plan of the company shall be proposed and formulated by the board of directors in combination with the provisions of the articles of association, the company’s profits and capital needs. The board of directors shall carefully study and demonstrate the timing, conditions and minimum proportion of the company’s cash dividends, the conditions for adjustment and the requirements of decision-making procedures, and the independent directors shall express clear opinions. Independent directors can solicit the opinions of minority shareholders, put forward dividend proposals and directly submit them to the board of directors for deliberation. Before the general meeting of shareholders deliberates on the profit distribution plan, the company shall actively communicate and exchange with shareholders, especially minority shareholders, through various channels, fully listen to the opinions and demands of minority shareholders, and timely respond to the concerns of minority shareholders. When considering the profit distribution plan, the company shall provide shareholders with online voting; The board of supervisors shall supervise the board of directors’ formulation of the company’s profit distribution plan and decision-making procedures; When the board of directors deliberates the profit distribution plan, it must be approved by more than half of all directors before it can be submitted to the general meeting of shareholders for deliberation; When the general meeting of shareholders deliberates the profit distribution plan, it must be approved by more than two-thirds of the voting rights held by the shareholders attending the general meeting of shareholders.
(VII) if the company meets the conditions for cash dividends but does not propose a cash dividend plan, or the total cash profits to be distributed by the company are less than 10% of the distributable profits realized in the current year, or the accumulated profits distributed in cash in the last three years are less than 30% of the average annual distributable profits realized in the three years, the board of directors of the company shall discuss the specific reasons The exact purpose and earnings of retained undistributed profits shall be specially explained, and the independent directors shall give independent opinions on it. The board of supervisors shall review and give opinions on it, and disclose it on the media designated by the company.
(VIII) if a shareholder occupies the company’s funds in violation of regulations, the company shall deduct the cash dividend distributed by the shareholder to repay the funds occupied.
(IX) the company shall disclose in detail the formulation and implementation of the cash dividend policy in the annual report, and make special explanations on the following matters: whether it complies with the provisions of the articles of association or the requirements of the resolution of the general meeting of shareholders, whether the dividend standard and proportion are clear and clear, whether the relevant decision-making procedures and mechanisms are complete, and whether the independent directors have performed their duties and played their due role, Whether minority shareholders have the opportunity to fully express their opinions and demands, and whether the legitimate rights and interests of minority shareholders have been fully protected.
If the cash dividend policy is adjusted or changed, it shall also specify whether the conditions and procedures of adjustment or change are compliant and transparent.
Article 4 adjustment of profit distribution policy
The company shall strictly implement the cash dividend policy determined in the articles of association and the specific cash dividend plan reviewed and approved by the general meeting of shareholders. If the company really needs to adjust the profit distribution policy (including cash dividend policy) and this plan according to the production and operation, investment planning and long-term development needs, the adjusted profit distribution policy (including cash dividend policy) and this plan shall not violate the relevant provisions of relevant laws and regulations, normative documents and the articles of Association; The board of directors shall demonstrate the reasons for the adjustment of the company’s profit distribution policy (including cash dividend policy) and this plan in detail and form a written demonstration report, and the independent directors and the board of supervisors shall express clear opinions. The company’s proposal to adjust the profit distribution policy (including cash dividend policy) and this plan shall be submitted to the general meeting of shareholders of the company for deliberation after being deliberated and approved by the board of directors, and shall be adopted by more than two-thirds of the voting rights held by the shareholders attending the general meeting of shareholders. When the general meeting of shareholders deliberates and adjusts the profit distribution policy (including cash dividend policy) and matters related to this plan, the company shall provide shareholders with online voting.
Article 5 formulation cycle and relevant decision-making mechanism of future shareholder return plan
1. The company shall review the shareholder return plan for the next three years at least once every three years, and make appropriate and necessary modifications to the dividend distribution policy being implemented by the company according to the expected operating conditions of the company, the opinions of shareholders (especially public investors), independent directors and supervisors, so as to determine the shareholder return plan for that period.
2. The board of directors shall comprehensively consider the characteristics of the industry, development stage, its own business model, profitability and whether there are major capital expenditure arrangements, and formulate annual or interim profit distribution plans in combination with the opinions of shareholders (especially public investors), independent directors and supervisors, which shall be implemented after being voted by the general meeting of shareholders of the company.
Article 6 the plan shall come into force from the date of deliberation and approval by the general meeting of shareholders of the company.
Hengdian Entertainment Co.Ltd(603103) March 10, 2022
