Zhejiang Renzhi Co.Ltd(002629)
Shareholder return planning for the next three years (20222024)
In order to improve and perfect the profit distribution decision-making and supervision mechanism of Zhejiang Renzhi Co.Ltd(002629) (hereinafter referred to as the “company”) and actively repay investors, according to the spirit of the notice on further implementing the matters related to cash dividends of listed companies, the regulatory guidance of listed companies No. 3 – cash dividends of listed companies, the Zhejiang Renzhi Co.Ltd(002629) articles of Association (hereinafter referred to as the “articles of association”) and other relevant provisions of the China Securities Regulatory Commission, Taking into account the company’s profitability, business development plan, shareholder return, social capital cost and external financing environment, the company hereby formulates the shareholder return plan for the next three years (20222024) (hereinafter referred to as the “plan”), as follows:
1、 Principles followed by the company in formulating this plan
（1） Strictly implement the basic principles of profit distribution stipulated in the articles of Association;
（2） Fully consider and listen to the opinions of shareholders (especially minority shareholders) and independent directors;
（3） Handle the relationship between short-term interests and long-term development, and the company’s profit distribution shall not damage the company’s sustainable operation ability;
（4） Adhere to cash dividends, pay attention to the reasonable return on investment to investors, maintain the continuity and stability of profit distribution, and comply with the relevant provisions of laws and regulations.
2、 Factors considered by the company in formulating this plan
The company focuses on long-term and sustainable development. When formulating this plan, the company comprehensively considers the actual operation, future profitability, operation and development plan, cash flow, shareholder return, social capital cost, external financing environment and other factors, and makes clear institutional arrangements for the profit distribution of the company on the basis of balancing the reasonable investment return of shareholders and the sustainable development of the company, To maintain the continuity and stability of profit distribution policy and ensure the long-term, sustainable and healthy operation ability of the company.
3、 Protection of shareholders’ interests
（1） The company’s profit distribution plan shall be proposed and prepared by the company’s management and the board of directors according to the company’s profitability, capital demand and shareholder return plan and in combination with the relevant provisions of the articles of association, which shall be submitted to the general meeting of shareholders for deliberation and approval after being reviewed and approved by the board of directors. Independent directors shall express independent opinions on the profit distribution plan. Within 2 months after the shareholders’ meeting or the shareholders’ meeting is held, a resolution on the distribution of profits shall be made.
（2） When the board of directors deliberates the specific plan of cash dividend, it shall carefully study and demonstrate the timing, conditions and minimum proportion of the company’s cash dividend, the conditions for adjustment and the requirements of decision-making procedures, and the independent directors shall express clear opinions.
（3） Independent directors can solicit the opinions of minority shareholders, put forward dividend proposals and directly submit them to the board of directors for deliberation.
（4） Before the general meeting of shareholders deliberates on the specific scheme of cash dividend, the company shall actively communicate and exchange with shareholders, especially minority shareholders, through various channels such as network, telephone and e-mail, fully listen to the opinions and demands of minority shareholders, and timely respond to the concerns of minority shareholders. When the general meeting of shareholders deliberates on the specific scheme of cash dividends, it shall provide online voting or other means to facilitate the participation of public shareholders in the general meeting of shareholders. The board of directors and shareholders of the company may also solicit shareholders’ voting rights.
（5） If the company is profitable in the current year, but the board of directors has not put forward a cash dividend plan, the board of directors shall make a detailed explanation, including the reasons for the non dividend, the purpose and use plan of the funds not used for dividend retained in the company, and the independent directors shall give independent opinions; After the approval of the board of directors, it shall be submitted to the general meeting of shareholders for deliberation and approval in the form of on-site and online voting.
（6） The board of supervisors shall supervise the implementation of the company’s profit distribution policy and shareholder return plan and decision-making procedures by the board of directors and management. If the company makes profits in the current year but the board of directors does not propose a cash dividend plan, or adjusts or changes the profit distribution policy and shareholder return plan, the board of supervisors of the company shall issue special review opinions.
（7） The company will disclose in detail the formulation and implementation of profit distribution plan and cash dividend policy in the annual report and semi annual report in strict accordance with relevant regulations, and make special explanations on the following matters:
1. Whether it complies with the provisions of the articles of association or the requirements of the resolution of the general meeting of shareholders;
2. Whether the dividend standard and proportion are clear and clear;
3. Whether the relevant decision-making procedures and mechanisms are complete;
4. Whether the independent directors have performed their duties and played their due role;
5. 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.
4、 Specific shareholder return plan of the company in the next three years (20222024)
（1） In the next three years (20222024), the company will implement a continuous and stable profit distribution policy, and can distribute profits in cash, stock or a combination of cash and stock, or other ways permitted by laws and regulations.
（2） In the next three years (20222024), the company can implement cash dividends when the following conditions are met at the same time:
1. The distributable profit realized by the company in this year (i.e. the remaining after tax profit after the company makes up the loss and withdraws the accumulation fund) is 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 the project of raising funds); Major investment plan or major cash expenditure means that the cumulative expenditure of the company’s proposed foreign investment, acquisition of assets or purchase of equipment in the next 12 months reaches or exceeds 30% of the company’s latest audited total assets, and the absolute amount exceeds 50 million yuan.
（3） In the next three years (20222024), the annual profit distributed by the company in cash shall not be less than 10% of the distributable profit realized in that year, and the cumulative profit distributed by the company in cash in any three consecutive fiscal years shall not be less than 30% of the annual distributable profit realized in that three years.
The board of directors of the company shall comprehensively consider the industry characteristics, development stage, its own business model, profitability and whether there are major capital expenditure arrangements, distinguish the following situations, and put forward differentiated cash dividend 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.
（4） In the next three years (20222024), the company can propose and implement stock dividends according to the annual profit and cash flow, on the premise of ensuring the minimum cash dividend ratio and the reasonable size of the company’s share capital and equity structure, and comprehensively considering the growth of the company, the dilution of net assets per share and other factors.
（5） In the next three years (20222024), under the condition of meeting the above cash dividend conditions, the company will actively adopt cash dividend distribution. In principle, cash dividend will be distributed once a year. The board of directors of the company can propose the company to carry out medium-term cash dividend according to the company’s profitability and capital demand.
5、 Formulation cycle and relevant decision-making mechanism of future shareholder return plan
（1） If the company really needs to adjust or change the profit distribution policy and shareholder return plan according to the production and operation, investment planning and long-term development, the adjusted or changed profit distribution policy and shareholder return plan shall not violate the relevant laws, regulations, normative documents and the relevant provisions of the articles of Association; The proposal on adjusting or changing the profit distribution policy and shareholder return plan shall be demonstrated in detail by the board of directors and fully consider the opinions of the board of supervisors and public investors. The proposal shall be submitted to the general meeting of shareholders for deliberation and approval after being deliberated and approved by the board of directors of the company. Independent directors shall express independent opinions, and the deliberation of the general meeting of shareholders shall be approved by more than 2 / 3 of the voting rights held by the shareholders attending the general meeting of shareholders.
When the general meeting of shareholders deliberates the changes of profit distribution policy and shareholder return plan, it shall provide online voting or other means to facilitate the participation of public shareholders in the general meeting of shareholders.
（2） The board of directors of the company shall review the plan every three years to ensure that the content of the shareholder return plan does not violate the profit distribution policy determined in the articles of association.
6、 Other matters
1. Matters not covered in this plan shall be implemented in accordance with relevant laws and regulations, normative documents and the articles of Association;
2. The plan shall be implemented from the date of deliberation and approval by the general meeting of shareholders of the company, and the same shall apply when revising;
3. The board of directors of the company is responsible for the interpretation of this plan.
Board of directors
