Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd
Code of conduct for controlling shareholders and actual controllers
Article 1 in order to further improve the corporate governance structure of Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. (hereinafter referred to as “the company”), standardize the behavior of controlling shareholders and actual controllers towards the company, and protect the legitimate rights and interests of the company and other shareholders, This specification is formulated in accordance with the company law of the people’s Republic of China, the Listing Rules of gem shares of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of GEM listed companies and other laws, administrative regulations and normative documents, as well as the articles of association of Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. (hereinafter referred to as the “articles of association”).
Article 2 the “controlling shareholder” as mentioned in these specifications refers to the shareholder who meets one of the following conditions:
（1） Directly holding more than 50% of the total share capital of the company;
（2） Although the proportion of shares held is less than 50%, the voting rights enjoyed by the shares held by them are enough to have a significant impact on the resolutions of the general meeting of shareholders.
Article 3 the “actual controller” mentioned in this code refers to a person who is not a shareholder of the company but can actually control the company’s behavior through investment relations, agreements or other arrangements.
Article 4 the relevant provisions of this code shall apply to the acts of controlling shareholders and actual controllers against the company’s controlling subsidiaries.
Article 5 the acts of the following subjects shall be regarded as the acts of the controlling shareholders and actual controllers, and the relevant provisions of this code shall apply mutatis mutandis:
（1） Legal persons and other organizations directly or indirectly controlled by controlling shareholders and actual controllers (except the company and its controlling subsidiaries);
（2） If the controlling shareholder and actual controller are natural persons, their parents, spouses and children;
（3） The largest shareholder.
Article 6 the controlling shareholders, actual controllers and their relevant personnel shall abide by the provisions of relevant laws and regulations, promote the standardized operation of the company and improve the quality of the company.
Article 7 the controlling shareholders and actual controllers shall take practical measures to 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. The controlling shareholders, actual controllers and other enterprises under their control shall not carry out horizontal competition that has a significant adverse impact on the company.
Article 8 the controlling shareholders and actual controllers shall use their control rights in good faith and shall not use their control rights to engage in acts detrimental to the legitimate rights and interests of the company and shareholders.
Article 9 the controlling shareholders, actual controllers and their affiliates shall not directly or indirectly occupy the company’s funds and assets and damage the legitimate rights and interests of the company and other shareholders by means of related party transactions, asset restructuring, advance payments, foreign investment, guarantee, profit distribution and other means.
Article 10 the controlling shareholder and the actual controller shall clearly promise that if the controlling shareholder, the actual controller and their affiliates occupy the company’s funds and require the company to provide guarantees in violation of laws and regulations, they will not transfer the shares of the company they hold and control until all the occupied funds are returned and all the illegal guarantees are lifted.
Article 11 the controlling shareholders, actual controllers and other enterprises under their control shall not use their shareholders’ rights or actual control ability to manipulate or instruct the company or its directors, supervisors and senior managers to engage in the following acts to damage the interests of the company and other shareholders:
（1） Require the company to provide funds, goods, services or other assets to itself, other units or individuals free of charge; （2） Requiring the company to provide or accept funds, goods, services or other assets on unfair terms; （3） Require the company to provide funds, goods, services or other assets to units or individuals that do not have solvency;
（4） Require the company to provide guarantees for units or individuals without solvency, or provide guarantees for other units or individuals without justifiable reasons;
（5） Require the company to give up creditor’s rights and bear debts without justifiable reasons;
（6） Seek business opportunities belonging to the company;
（7） Damage the interests of the company and other shareholders by other means.
Article 12 the commitments made by the controlling shareholders and actual controllers shall be specific, clear, unambiguous and operable, and effective measures shall be taken to ensure the effective implementation of the commitments made.
The controlling shareholders and actual controllers shall pay attention to their own business and financial conditions and evaluate their performance ability. If they are unable to perform their commitments due to the deterioration of their business and financial conditions, changes in the guarantor or performance collateral, they shall inform the company in time, explain the specific conditions affecting the performance of their commitments, and provide new performance guarantees at the same time. The controlling shareholder and the actual controller shall timely notify the company when the conditions for the performance of the commitment are about to be or have been met.
Unless otherwise specified, the transfer of shares held by the controlling shareholder or actual controller before the completion of relevant commitments shall not affect the performance of relevant commitments.
Article 13 the controlling shareholders and actual controllers shall ensure the independence of the company’s personnel and shall not affect the independence of the company’s personnel in any of the following ways:
（1） Influence the appointment and removal of the company’s personnel and restrict the performance of the duties of the company’s directors, supervisors, senior managers and other personnel serving in the company by exercising the proposal right, voting right and other laws and regulations, relevant provisions of Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”) and shareholders’ rights stipulated in the articles of Association;
（2） Appoint senior managers of the company to hold other administrative positions except directors and supervisors in the controlling shareholders or enterprises controlled by them;
（3） Pay salaries or other remuneration to senior managers of the company;
（4） Ask the company’s personnel to provide services free of charge;
（5） To cause the directors, supervisors, senior managers and other personnel serving in the company to make decisions or conduct detrimental to the interests of the company;
（6） Other circumstances identified by laws and regulations and Shenzhen Stock Exchange.
Article 14 the controlling shareholders, actual controllers and their affiliates shall ensure the financial independence of the company and shall not affect the financial independence of the company in any of the following ways:
（1） Share bank accounts with the company or borrow financial accounts such as the company’s bank accounts to deposit the company’s funds into the accounts controlled by the controlling shareholders, actual controllers and their affiliates in any way;
（2） Non operating occupation of the company’s funds by various means;
（3） Require the company to provide guarantee in violation of laws and regulations;
（4） 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.
（5） Other circumstances identified by relevant laws and regulations and Shenzhen Stock Exchange.
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 15 the controlling shareholders, actual controllers and their affiliates shall not occupy the company’s funds in any of the following ways: (1) require the company to advance and bear wages, welfare, insurance, advertising and other expenses, costs and other expenses; （2） Require the company to repay its debts on its behalf;
（3） Require the company to borrow funds for its use with compensation or free, directly or indirectly;
（4） Require the company to provide entrusted loans to it through banks or non bank financial institutions;
（5） Require the company to entrust it to carry out investment activities;
（6） Require the company to issue commercial acceptance bills without real transaction background, or require the company to provide funds in other ways when there is no consideration for goods and services or the consideration is obviously unfair;
（7） Failing to repay the debts formed by the company’s guarantee liability in time;
（8） Require the company to provide funds to it through current accounts without commercial substance;
（9） The capital occupation caused by transaction matters is not solved within the specified or commitment period;
（10） Other circumstances recognized by China Securities Regulatory Commission (hereinafter referred to as “CSRC”) and Shenzhen Stock Exchange. The controlling shareholder and actual controller 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 16 the controlling shareholders, actual controllers and other enterprises under their control shall ensure the business independence of the company and shall not affect the business independence of the company in any of the following ways:
（1） Carry out horizontal competition that has a significant adverse impact on the company;
（2） Require the company to conduct unfair related party transactions with it;
（3） Ask the company to provide goods, services or other assets free of charge or under obviously unfair conditions. （4） Other circumstances identified by relevant laws and regulations and Shenzhen Stock Exchange.
The controlling shareholders and actual controllers shall not take advantage of their control over the company to seek business opportunities belonging to the company.
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 of major matters according to law, and participate in the decision-making of major matters of the company through the general meeting of shareholders by exercising the proposal right, voting right and other laws and regulations, relevant provisions of Shenzhen Stock Exchange and shareholders’ rights specified in the articles of association.
Article 17 the controlling shareholders and actual controllers shall maintain the integrity of the company’s assets and shall not affect the integrity of the company’s assets in any of the following ways:
（1） Share main machinery and equipment, plant, patented and non patented technology with the company;
（2） Share raw material procurement and product sales system with the company;
（3） Other circumstances identified by relevant laws and regulations and Shenzhen Stock Exchange.
The controlling shareholders and actual controllers shall maintain the independence of the company’s institutions, support the independent operation of the company’s board of directors, board of supervisors, business operation departments or other institutions and their personnel, and shall not interfere with the establishment, adjustment or cancellation of the company’s institutions, or influence the company’s board of directors The board of supervisors, other institutions and their personnel restrict or exert other improper influence in the exercise of their functions and powers.
Article 18 the controlling shareholders and actual controllers shall fully protect the rights of minority shareholders such as proposal right, voting right and director nomination right, and shall not restrict or obstruct the exercise of their legitimate rights for any reason.
Article 19 when proposing a proposal, the controlling shareholder and the actual controller shall fully consider and grasp the impact of the proposal on the interests of the company and minority shareholders.
Article 20 transactions between controlling shareholders, actual controllers and the company shall follow the principles of equality, voluntariness, equivalence and compensation, and shall not affect the independent decision-making of the company in any way, and shall not harm the legitimate rights and interests of the company and minority shareholders through fraud, false statements or other improper acts.
Article 21 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 22 the controlling shareholders and actual controllers shall not buy or sell the shares of the company in the name of others or by providing funds to others.
The controlling shareholders and actual controllers shall purchase and sell the shares of the company in strict accordance with laws, administrative regulations, departmental rules, normative documents and other relevant provisions.
Article 23 when the controlling shareholders and actual controllers transfer their control rights through agreement, they shall ensure that the transaction is fair, fair and reasonable, and shall not use the transfer of control rights to damage the legitimate rights and interests of the company and other shareholders.
Article 24 before transferring the control right, the controlling shareholder and the actual controller shall conduct reasonable investigation on the subject qualification, integrity status, transfer intention, performance ability and whether there are circumstances in which the control right cannot be transferred, so as to ensure that the transaction is fair and reasonable, and shall not use the transfer of control right to damage the legitimate rights and interests of the company and other shareholders.
Article 25 If the controlling shareholder or actual controller has the following circumstances before the transfer of control right, it shall be solved:
（1） Failing to pay off its debts to the company or to release the guarantee provided by the company;
（2） The commitments to the company or other shareholders have not been fulfilled;
（3） Other matters that have a significant adverse impact on the interests of the company or minority shareholders.
If the proceeds from the transfer of shares by the above-mentioned subject are used to return the company or terminate the guarantee provided by the company, they can be transferred.
Article 26 when transferring the control right of the company, the controlling shareholders and actual controllers shall pay attention to coordinating the replacement of new and old shareholders to prevent turbulence in the company and ensure the stable transition of the board of directors and the management of the company.
Article 27 the controlling shareholders and actual controllers shall strictly abide by their commitments on share transfer and try their best to maintain the stability of the company’s equity structure and operation.
Article 28 Where the controlling shareholders and actual controllers buy and sell the shares of the company through trust or other management methods, the relevant provisions of these specifications shall apply.
Article 29 in case of any of the following circumstances, the controlling shareholder or actual controller shall immediately notify the company and cooperate with it in performing the obligation of information disclosure:
（1） More than 5% of the shares held and controlled by the company are pledged, frozen, judicial auction, trusteeship or trust, or their voting rights are restricted according to law, or there is a risk of compulsory transfer of ownership;
（2） Enter bankruptcy, dissolution and other procedures;
（3） Major changes have taken place or are planned to take place in the situation of holding or controlling the company, and major changes have taken place in the situation of the actual controller and other enterprises under his control engaged in the same or similar business as the company;
（4） Major asset reorganization, debt reorganization or business reorganization of the company;
（5） Be subject to criminal punishment, be suspected of violating laws and regulations, be filed for investigation by the CSRC, or be subject to administrative punishment by the CSRC, or be subject to major administrative punishment by other competent authorities;
（6） Reports or rumors related to controlling shareholders and actual controllers may have a great impact on the trading price of the company’s shares and their derivatives;
（7） Being suspected of serious violation of discipline and law or job-related crime, and being detained by the discipline inspection and supervision organ and affecting his performance of duties;
（8） Coercive measures are taken for suspected crimes;
（9） Other possible influences on the trading prices of the company’s shares and their derivatives
