Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd
Management system of subsidiaries
Chapter I General Provisions
Article 1 Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. (hereinafter referred to as “the company”) in order to strengthen the management of its subsidiaries, establish a good management and operation mechanism between the company and its subsidiaries, and safeguard the interests of the company and investors, in accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the Listing Rules of Shenzhen Stock Exchange on the gem and other laws and regulations This system is formulated in accordance with the relevant provisions of normative documents and the articles of association of Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. (hereinafter referred to as the “articles of association”), in combination with the specific internal environment, management requirements and actual situation of the company and its subsidiaries.
Article 2 the term “subsidiary” as mentioned in this system refers to the company that is included in the scope of the company’s consolidated statements and is controlled or actually controlled by the company. include:
（1） Companies with a shareholding ratio of more than 50%;
（2） Although the shareholding ratio of the company does not reach 50%, it can determine the composition of more than half of the members of its board of directors, or it can actually control the company through agreement or other arrangements.
Article 3 this system is applicable to the company and its subsidiaries. The directors, supervisors and senior managers of subsidiaries shall strictly implement the system and do a good job in management, guidance and supervision in a timely and effective manner in accordance with the system. Article 4 subsidiaries shall standardize their operation, strictly abide by relevant laws, regulations and the provisions of this system, and formulate detailed rules for the implementation of their own internal control system according to their own business characteristics and environmental conditions.
If a subsidiary directly invested and controlled by the company controls other companies, it shall establish a management system for its subsidiaries layer by layer with reference to the requirements of this system, and accept the supervision of the company.
Chapter II standardized operation
Article 5 subsidiaries shall establish and improve the corporate governance structure and internal management system in accordance with the provisions of relevant laws and regulations, combined with their own characteristics and with reference to the company’s internal control system.
Article 6 a subsidiary shall set up a board of shareholders (other than a wholly-owned subsidiary), a board of directors (or executive director), a board of supervisors (or 1-2 supervisors) and other discussion bodies according to law.
Article 7 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 minutes and resolutions of the meeting shall be signed by the directors, shareholders or authorized representatives and supervisors present at the meeting.
Article 8 a subsidiary shall timely, completely and accurately provide the board of directors with its business performance, financial status, business prospects and other information.
Article 9 when a subsidiary holds a board of directors, shareholders’ meeting or other major meeting, the notice and agenda of the meeting shall be reported to the Secretary of the board of directors of the company within 5 days before the meeting. The Secretary of the board of directors shall review and judge whether the matters discussed must be approved by the general manager, the board of directors or the general meeting of shareholders.
Article 10 when a subsidiary holds a shareholders’ meeting, the chairman of the company or the person authorized by him shall attend the meeting as a shareholder representative.
Article 11 subsidiaries shall submit relevant resolutions and minutes of meetings to the company for filing within 1 working day after making resolutions of the general meeting of shareholders, the board of directors and the board of supervisors.
Article 12 subsidiaries must establish a strict file management system in accordance with the company’s file management regulations. The articles of association, resolutions of the shareholders’ meeting, resolutions of the board of directors, resolutions of the board of supervisors, business licenses, seals, relevant approvals of government departments, various major contracts and other important documents of subsidiaries must be properly kept.
Chapter III Business Decision Management
Article 13 the operation and development planning of subsidiaries shall be subject to and serve the development strategy and overall planning of the company, and refine and improve their own planning under the framework of the company’s development planning.
Article 14 subsidiaries shall accept the supervision of the company and establish corresponding business plans and risk management procedures in accordance with the company’s business strategy and risk management policy.
Article 15 according to its own overall business plan and on the basis of fully considering the business characteristics and operation conditions of subsidiaries, the company assigns various business objectives such as annual main business income and realized profits to subsidiaries, and the operation management of subsidiaries shall formulate and implement specific implementation plans according to the business objectives assigned by the company.
Article 16 major transactions of subsidiaries shall be subject to the approval procedures in accordance with the provisions of the articles of association, foreign investment management system, foreign guarantee management system, related party transaction management system and other internal control systems. After being deliberated and approved by the chairman of the board, the board of directors and the general meeting of shareholders, the subsidiary shall perform its internal approval procedures.
Article 17 the profit distribution of a subsidiary company shall be made in the form of a decision (or resolution of the shareholders’ meeting) of the subsidiary company after being deliberated and approved by the board of directors of the company.
Article 18 If the company and its subsidiaries suffer losses due to ultra vires in business decision-making activities, the main responsible personnel shall be given sanctions of criticism, warning or even dismissal, and shall be required to bear the liability for compensation at the same time.
Chapter IV personnel management
Article 19 the company shall appoint or recommend directors, supervisors, senior managers and heads of functional departments to its subsidiaries according to the proportion of capital contribution.
Article 20 the candidates of directors, supervisors and senior managers appointed or recommended to the subsidiary shall be nominated by the chairman of the company. The term of office of the appointed or recommended personnel shall be implemented in accordance with the provisions of the articles of association of the subsidiary. The company may adjust the appointed or recommended personnel during the term of office as needed.
Article 21 the dispatched personnel of the company shall accept the annual assessment of the personnel department of the company and submit a written report on their work. Article 22 the establishment of the internal management organization of a subsidiary shall be reported to the board of directors of the company. The subsidiary shall formulate the personnel management system according to its actual situation and report it to the personnel department of the company.
Article 23 the post setting of subsidiaries shall be based on the principle of being capable and efficient, and the staffing system shall be implemented. Article 24 major changes in the positions of the company’s key personnel or senior managers shall be reported to the board of directors and the management department in a timely manner.
Chapter V Financial Management
Article 25 the financial department of the subsidiary shall accept the business guidance and supervision of the financial department of the company.
Article 26 the accounting policies, accounting estimates and changes adopted in the daily accounting and financial management of subsidiaries shall comply with the accounting system for business enterprises, accounting standards for business enterprises and relevant provisions of the company’s financial accounting.
Article 27 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 company’s financial management system.
Article 28 a subsidiary shall implement the financial management policies and accounting systems stipulated by the state, and formulate a financial management system suitable for the actual situation of the subsidiary.
Article 29 subsidiaries shall submit accounting statements and provide accounting materials to the company in a timely manner in accordance with the requirements of the company for the preparation of consolidated accounting statements. Its accounting statements shall be audited by certified public accountants entrusted by the company.
Subsidiaries shall submit annual financial and accounting reports to the company within 20 days after the end of each fiscal year, semi annual financial and accounting reports to the company within 15 days after the end of the first 6 months of each fiscal year, quarterly financial and accounting reports to the company within 10 days after the end of the first 3 months and the first 9 months of each fiscal year, and financial and accounting reports of the current month to the company within 8 days after the end of each month in other months.
Article 30 a subsidiary shall strictly control the exchange of funds, assets and other resources with related parties to avoid non operational occupation. In case of any abnormality, the company 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 31 when a subsidiary needs to borrow from abroad due to its business development and overall fund arrangement, it shall give full consideration to its bearing capacity and solvency of loan interest, and implement it only after performing the corresponding approval procedures in accordance with the relevant systems of the company and subsidiaries.
Article 32 Where the company provides loan guarantee for a subsidiary, it shall be deemed as the company’s external guarantee, and the relevant provisions of the articles of association and the external guarantee management system shall be implemented.
Chapter VI investment management
Article 33 subsidiaries may implement technological transformation or invest in new projects according to market conditions and enterprise development needs. The foreign investment of subsidiaries shall comply with the relevant provisions of the articles of association and the foreign investment management system.
Article 34 for the approved investment project, the subsidiary shall report the progress of the project in the current month to the company within 10 days after the end of each month.
Article 35 when the company needs to know about the implementation and progress of the investment projects of its subsidiaries, the subsidiaries and relevant personnel shall actively cooperate and assist, reply in a timely, accurate and complete manner, and provide relevant materials as required.
Article 36 without the approval of the board of directors or the general meeting of shareholders, subsidiaries shall not make entrusted financial management, stock, futures, options, warrants and other venture capital.
Chapter VII information management
Article 37 the legal representative of a subsidiary is the first person responsible for its information management. The subsidiary must abide by the company’s relevant systems on internal reporting of major information, and the Securities Department of the company is the contact Department for information management between the company and its subsidiaries.
Article 38 a subsidiary shall, in accordance with the requirements of the company’s relevant systems on internal reporting of major information and in combination with its specific conditions, formulate corresponding management systems, clarify the departments and personnel of information management affairs, and report to the Securities Department of the company.
Article 39 a subsidiary shall report to the board of directors within one day in case of the following major events: (1) foreign investment;
（2） Acquisition and sale of assets;
（3） Conclusion, change and termination of important contracts (loan, entrusted operation, entrusted financial management, gift, contract, lease, etc.);
（4） Major operating or non operating losses;
（5） Suffer heavy losses;
（6） Major litigation and arbitration matters;
（7） Administrative punishment;
（8） Other major matters.
Chapter VIII audit supervision
Article 40 the company shall regularly or irregularly audit and supervise its subsidiaries, and may employ external auditors or accounting firms to undertake the audit of its subsidiaries.
Article 41 the audit work of the company on its subsidiaries includes but is not limited to: the implementation of relevant national laws and regulations; Implementation of various management systems of the company; Construction and implementation of internal control system of subsidiaries; Operating performance, management and financial revenue and expenditure of subsidiaries; Term of office, economic responsibility and other special audits of senior managers.
Article 42 after receiving the audit notice, the subsidiary shall be prepared to accept the audit, arrange the personnel of relevant departments to cooperate with the company’s audit work, and provide all materials required for the audit, which shall not be perfunctory or obstructed.
Article 43 after the audit opinions and audit decisions approved by the company are delivered to the subsidiary, the subsidiary must seriously implement them.
Chapter IX assessment, reward and punishment
Article 44 subsidiaries must establish an assessment, reward and punishment system suitable for the actual situation of the company according to their own conditions, fully mobilize the enthusiasm and creativity of the management and all employees, and form a fair and reasonable competition mechanism.
Article 45 subsidiaries shall formulate performance appraisal and salary management system according to their actual situation and report to the personnel department of the company.
Article 46 the subsidiary shall assess the senior managers after the end of each fiscal year, and implement rewards and punishments according to the assessment results.
Article 47 If the directors, supervisors and senior managers of a subsidiary fail to perform their corresponding responsibilities and obligations and cause adverse effects or heavy losses to the business activities and economic interests of the company or the subsidiary, the company has the right to ask the board of directors of the subsidiary to punish the party concerned, and the party concerned shall bear the corresponding liability for compensation and legal liability. Chapter X supplementary provisions
Article 48 the “transaction” mentioned in Article 16 of the system includes the following matters:
（1） Purchase or sale of assets;
（2） Foreign investment (including entrusted financial management, investment in subsidiaries, except the establishment or capital increase of wholly-owned subsidiaries); （3） Provide financial assistance (including entrusted loans);
（4） Providing guarantee (refers to the guarantee provided by the subsidiary for others);
（5） Lease in or lease out assets;
（6） Sign management contracts (including entrusted operation, entrusted operation, etc.);
（7） Donated or donated assets;
（8） Reorganization of creditor’s rights or debts;
（9） Transfer of research and development projects;
（10） Sign the license agreement;
（11） Waiver of rights (including waiver of preemptive right, preemptive right to subscribe capital contribution, etc.);
（11） Other transactions recognized by Shenzhen Stock Exchange and the articles of association.
The following activities do not belong to the matters specified in the preceding paragraph:
（1） Purchase of raw materials, fuel and power related to daily operation (excluding the purchase and sale of such assets involved in asset replacement);
（2） Selling products, commodities and other assets related to daily operation (excluding the purchase and sale of such assets involved in asset replacement);
（3） Although the transactions specified in the preceding paragraph are carried out, they belong to the main business activities of the company.
Article 49 this system shall be implemented from the date of approval by the general meeting of shareholders of the company.
Article 50 matters not covered in this system shall be implemented in accordance with relevant national laws, regulations and the articles of association. Article 51 If this system is inconsistent with the subsequent laws, regulations or
