Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209)
Management system of subsidiaries
(revised in 2022)
Chapter I General Provisions
Article 1 in order to strengthen the management of the subsidiary of Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) (hereinafter referred to as “the company”), ensure the standardized, efficient and orderly operation of the subsidiary, improve the overall operation efficiency and anti risk ability of the company, and effectively protect the interests of investors, This system is formulated in accordance with the company law of the people’s Republic of China (hereinafter referred to as the company law), the Listing Rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of companies listed on the main board (hereinafter referred to as the standardized operation) and other laws and regulations, as well as the provisions of Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) articles of Association (hereinafter referred to as the articles of association) and in combination with the actual situation of the company.
Article 2 the term “subsidiary” as mentioned in this system refers to the company with independent legal person status legally established to enhance the competitiveness of the company according to the overall development strategic plan of the company, including wholly-owned subsidiaries and holding subsidiaries. Wholly owned subsidiary refers to the company invested by the company and holding 100% of the shares in the subsidiary; Holding subsidiary refers to a company jointly invested and established by the company and other companies or natural persons. The company controls more than 50% or less, but can decide the composition of more than half of the members of its board of directors, or can actually control through agreements or other arrangements.
As a wholly-owned subsidiary and holding subsidiary of the company, it is required to abide by the management regulations of the securities regulatory authorities on listed companies, abide by the company’s management systems on corporate governance, related party transactions, information disclosure, financial management and other aspects, and be honest, open and transparent.
Article 3 under the framework of the company’s overall policies and objectives, subsidiaries operate and manage independently, and operate the property of enterprise legal persons legally and effectively. The company exercises the management of its subsidiaries in accordance with relevant laws and regulations and the standardized operation requirements of listed companies.
Article 4 subsidiaries shall follow the provisions of this system, combine the company’s own internal control system, and formulate specific implementation rules according to their own business characteristics and environmental conditions, so as to ensure the implementation and implementation of this system. If a subsidiary controls other companies at the same time, it shall establish a management system for its subsidiaries layer by layer in accordance with the requirements of standardized operation and this system, and accept the supervision of the company.
Article 5 all functional departments of the company shall timely and effectively manage, guide and supervise the subsidiaries in accordance with this system and relevant internal control systems. The directors, supervisors and senior managers appointed by the company to the subsidiaries shall be responsible for the effective implementation of this system.
Chapter II standardized operation
Article 6 subsidiaries shall establish and improve the corporate governance structure and internal management system in accordance with the provisions of the company law and relevant laws and regulations and in combination with their own characteristics.
Article 7 subsidiaries shall establish a shareholders’ meeting (general meeting) (a wholly-owned subsidiary does not have a shareholders’ meeting, and shareholders exercise the rights of the shareholders’ meeting), a board of directors (or executive directors) and a board of supervisors (or supervisors).
Article 8 a subsidiary shall convene a general meeting of shareholders, a board of directors or a board of supervisors in accordance with its articles of association. The shareholders’ meeting, the board of directors and the board of supervisors shall have meeting minutes, and the meeting minutes and resolutions shall be signed by the directors, shareholders or authorized representatives and supervisors present at the meeting.
Article 9 subsidiaries shall conduct major matters such as restructuring and reorganization, merger and acquisition, investment and financing, asset disposal and income distribution in accordance with the procedures and authorities specified in relevant laws, regulations and relevant rules and regulations of the company, and shall report to the board of directors of the company for the record.
Article 10 a subsidiary shall timely, completely and accurately provide the board of directors with information about the company’s business performance, financial status and business prospects, so that the board of directors can make scientific decisions, supervise and coordinate. Article 11 when a subsidiary holds a shareholders’ meeting, board of directors or other major meeting, the notice of the meeting and the deliberation proposal shall be submitted to the office of the Secretary of the board of directors of the company five days before the meeting is held, and the Secretary of the board of directors of the company shall review and judge whether the matters discussed must be approved by the general manager, the board of directors or the shareholders’ meeting, and whether they belong to the information that should be disclosed.
Article 12 after making the resolutions of the shareholders’ meeting and the board of directors, the subsidiaries shall, within two working days after the resolutions are made, send a copy of their relevant meeting resolutions and meeting minutes to the office of the Secretary of the board of directors of the company for filing.
Article 13 subsidiaries must establish a strict file management system in accordance with the company’s file management regulations. Important documents such as the articles of association, resolutions of the shareholders’ meeting, resolutions of the board of directors, business licenses, seals, relevant approvals of government departments and various major contracts of subsidiaries must be properly kept by special personnel in accordance with relevant regulations. Documents involving the overall interests of the company shall be reported to the Secretary Office of the board of directors for the record, The storage period is 20 years.
Chapter III personnel management
Article 14 the company shall appoint or recommend directors, supervisors and senior managers to the subsidiaries according to the proportion of capital contribution, including but not limited to the general manager, deputy general manager, financial director and department manager of the subsidiaries.
Article 15 the company’s appointment of directors, supervisors and senior managers to subsidiaries shall comply with the following provisions: (I) recommend candidates for directors and supervisors to subsidiaries, which shall be elected by their shareholders’ meeting, exercise the functions and powers of directors and supervisors on behalf of the company within the scope authorized by the articles of association of subsidiaries, bear corresponding responsibilities, be responsible to the board of directors of the company and ensure the realization of the legitimate rights and interests of the company;
(II) the number of directors and supervisors appointed or recommended by the company shall account for more than half of the members of the board of directors and board of supervisors of the holding subsidiary;
(III) if a wholly-owned subsidiary does not establish a board of directors, the executive director shall be appointed or recommended by the company; If a holding subsidiary establishes a board of directors, the chairman shall be appointed or recommended by the company;
(IV) if the holding subsidiary does not have a board of supervisors but only has 1-2 supervisors, the candidates recommended by the company shall serve as supervisors; (V) the company has the right to recommend candidates for general manager and deputy general manager of the holding subsidiary, appoint them after being approved by the board of directors of the holding subsidiary, exercise corresponding functions and powers within the scope authorized by the articles of association of the holding subsidiary, and be responsible to its board of directors;
(VI) the appointment and dismissal of the chief financial officer (Manager) of the holding subsidiary shall be approved by the company in advance. During his tenure, he shall accept the business guidance and supervision of the head of the company’s finance department;
(VII) the term of office of the directors, supervisors and senior managers of the holding subsidiary shall be implemented in accordance with the articles of association of the subsidiary. The company may make appropriate adjustments to the candidates of directors, supervisors and senior managers appointed or recommended during the term of office as required.
Article 16 the personnel dispatched by the company shall accept the annual assessment of the human resources department of the company and submit a written report to the general manager of the company within one month after the end of the accounting year.
Article 17 the establishment of the internal management organization of a subsidiary shall be reported to the human resources department of the company. The subsidiary shall formulate the personnel management system according to its actual situation and report it to the human resources department of the company.
Article 18 the post setting of subsidiaries shall be based on the principle of being capable and efficient, and the staffing system shall be implemented. Article 19 the adjustment and change of senior managers or key positions of subsidiaries shall be reported to the human resources department of the company, and major adjustment and change shall be reported to the Secretary Office of the board of directors of the company in time.
Chapter IV financial management
Article 20 the financial department of the subsidiary shall accept the business guidance and supervision of the financial department of the company.
Article 21 the accounting policies, accounting estimates and changes adopted in the daily accounting and financial management of subsidiaries shall comply with the accounting standards for business enterprises and the relevant provisions of the company’s financial accounting.
Article 22 subsidiaries shall do a good job in the basic work of financial management and strengthen the management of costs, expenses and funds in accordance with the provisions of the company’s financial management system.
Article 23 subsidiaries shall implement the financial management policies and accounting systems stipulated by the state. At the same time, formulate a financial management system suitable for the actual situation of subsidiaries.
Article 24 a subsidiary shall timely submit regular accounting reports to the company, including accounting statements and accounting materials, in accordance with the requirements of the company for the preparation of consolidated accounting statements and the disclosure of accounting information. Its accounting statements shall also be audited by certified public accountants entrusted by the company.
Article 25 subsidiaries shall strictly control the capital, assets and other resource exchanges with related parties to avoid any non operating occupation. In case of any abnormal situation, the subsidiary shall timely request the board of directors of the company to take corresponding measures. If losses are caused to the company due to the above reasons, the company has the right to ask the board of directors of the subsidiary to investigate the responsibilities of relevant personnel according to law.
Article 26 when a subsidiary needs to borrow from abroad due to its business development and overall fund arrangement, it shall fully consider its bearing capacity and solvency of loan interest, and implement it only after performing the corresponding approval procedures in accordance with the provisions of the relevant systems of the subsidiary.
Article 27 If the company provides loan guarantee for a subsidiary, the subsidiary shall apply for it in accordance with the procedures specified in the company’s external guarantee, and perform the duties of the debtor without causing losses to the company.
Article 28 without the approval of the board of directors or the general meeting of shareholders, subsidiaries shall not provide external guarantee or mutual guarantee.
Chapter V investment management
Article 29 subsidiaries may invest in technological transformation projects or new projects according to market conditions and the development needs of the company.
Article 30 the subsidiary shall follow the principles of legality, prudence, safety and effectiveness, conduct preliminary investigation and feasibility demonstration on the project, provide relevant information about the proposed investment project as far as possible on the premise of effectively controlling investment risks and paying attention to investment benefits, and organize the preparation of feasibility analysis report as required.
Article 31 When implementing the project investment, the subsidiary must control the approved investment amount, ensure the project quality, project progress and expected investment effect, and complete the project final settlement and project acceptance in time. Article 32 for approved investment projects, subsidiaries shall report the project progress to the company at least once a quarter.
Article 33 when the company needs to know the implementation and progress of the investment project of the subsidiary, the relevant personnel of the subsidiary shall actively cooperate and assist, reply in a timely, accurate and complete manner, and provide relevant materials as required.
Article 34 before a subsidiary makes investment in entrusted financial management, stocks, futures, options, warrants and other aspects, it shall be approved by the shareholders’ meeting of the subsidiary. Subsidiaries shall not engage in such investment activities without approval. Chapter VI Information Disclosure Management
Article 35 the chairman or executive director of a subsidiary is the first person responsible for its information disclosure management. The subsidiary must abide by the company’s information disclosure management system, and the office of the Secretary of the board of directors of the company is the supervision department of the information management of the subsidiary.
Article 36 a subsidiary shall, in accordance with the requirements of the company’s information disclosure management system, specify the departments and personnel for information disclosure management and report them to the office of the Secretary of the board of directors of the company.
Article 37 a subsidiary shall perform the following obligations when providing information to the company:
(I) provide all information that may have a significant impact on the trading price of the company’s shares and their derivatives;
(II) ensure that the information provided is true, timely, accurate and complete;
(III) directors, managers and relevant personnel involved in inside information of subsidiaries shall not disclose important inside information without authorization;
(IV) the information provided by the subsidiary must be in written form, signed by the legal representative of the subsidiary and stamped with the company’s official seal.
Article 38 when the following major events occur in a subsidiary, it shall report to the Secretary Office of the board of directors in time:
(I) major changes in the company’s business policy and business scope;
(II) the company’s major investment behavior, in which the company purchases or sells more than 30% of the company’s total assets within one year, or the mortgage, pledge, sale or scrapping of the company’s main assets for business use exceeds 30% of the assets at one time;
(III) the company enters into important contracts, provides major guarantees or engages in related party transactions (see the list of related parties below), which may have a significant impact on the company’s assets, liabilities, rights and interests and operating results;
(IV) the company has major debts and fails to pay off the due major debts;
(V) the company has suffered major losses or losses;
(VI) major changes in the external conditions of the company’s production and operation;
(VII) the company’s plans for dividend distribution and capital increase, important changes in the company’s equity structure, decisions on capital reduction, merger, division, dissolution and application for bankruptcy, or entering bankruptcy proceedings or being ordered to close down according to law; (VIII) major litigation and arbitration involving the company;
(IX) the company is suspected of committing a crime and is filed for investigation according to law;
(x) the company is liable for large amount of compensation;
（11） The company makes provision for impairment of large assets;
（12） The shareholders’ equity of the company is negative;
（13） The main debtors of the company are insolvent or enter bankruptcy proceedings, and the company fails to draw sufficient bad debt reserves for corresponding creditor’s rights;
（14） The newly published laws, administrative regulations, rules and industrial policies may have a significant impact on the company;
（15） Major assets are sealed up, seized or frozen; Major bank accounts are frozen;
（16） Major or all businesses come to a standstill;
（17） Obtaining additional income that has a significant impact on the current profit and loss may have a significant impact on the company’s assets, liabilities, equity or operating results.
（18） Other matters stipulated by the China Securities Regulatory Commission.
Article 39 “timely” in Article 38 refers to the day when the event occurs, “important”, “large amount” and “significant” refer to the matters whose amount or nature reaches the level that need to be submitted to the board of directors of the subsidiary for deliberation and approval.
Chapter VII audit supervision
Article 40 the company shall regularly or irregularly implement the audit supervision of its subsidiaries, and may employ external auditors or accounting firms to undertake the audit of its subsidiaries, and the relevant expenses shall be borne by the company.
Article 41 The Audit Department of the company is responsible for the audit of subsidiaries, including but not limited to:
