General Principles - The rules aim to protect the rights of Hubei Hendi Pharmaceutical Co., Ltd. and its shareholders, standardize the board's decision-making processes, and clarify the responsibilities of directors [1][2] - The board of directors is the decision-making body for the company's management, responsible for major operational decisions and accountable to the shareholders [1][2] Board Composition - The board consists of eight directors, including three independent directors and one employee representative [2] - At least one-third of the board members must be independent directors, with at least one being a professional accountant [2] Board Responsibilities - The board is responsible for convening shareholder meetings, executing resolutions, and making decisions on the company's operational plans and financing [9][10] - The board must act within the authority granted by the shareholders and the company's articles of association [10][11] Meeting Procedures - The board must hold at least two regular meetings annually, with provisions for special meetings as needed [15][16] - Directors must be notified of meetings in advance, and all relevant materials must be provided to ensure informed decision-making [18][19] Voting and Decision-Making - Decisions require a majority vote from the attending directors, with specific rules for related party transactions and other significant matters [41][42] - Independent directors must provide reasons for any dissenting votes, which should be disclosed alongside board resolutions [39][40] Documentation and Disclosure - Meeting minutes must accurately reflect discussions and decisions, and must be signed by attendees [46][47] - The company is required to disclose board resolutions and significant matters to the Shenzhen Stock Exchange within two working days [48][49] Amendments and Interpretation - The rules can be amended by the board and must be approved by the shareholders [55][56] - The board is responsible for interpreting these rules [56]

Summary of Hubei Biocause Heilen Pharmaceutical Co., Ltd. Articles of Association Core Points - The articles of association are established to protect the rights and interests of the company, shareholders, employees, and creditors, in accordance with relevant laws and regulations [2][3] - The company was formed through the overall change of Hubei Baike Heilen Pharmaceutical Co., Ltd. and is registered in Jingmen City [2][3] - The company has a registered capital of RMB 417.6 million and was approved for public stock issuance on November 16, 2021, with shares listed on the Shenzhen Stock Exchange on December 22, 2021 [3][4] Company Structure and Governance - The company is a permanent joint-stock company, with the chairman serving as the legal representative [3][4] - The legal representative's civil activities bind the company, and the company is liable for damages caused by the representative in the course of their duties [3][4] - Shareholders are liable for the company's debts only to the extent of their subscribed shares, while the company is liable for its debts with its entire assets [3][4] Business Objectives and Scope - The company's business objectives include caring for life and creating a healthy lifestyle [4] - The business scope includes drug production, import and export of drugs, entrusted drug production, and internet information services related to drugs [4][5] Share Issuance and Management - The company issues shares in the form of stocks, adhering to principles of openness, fairness, and justice [6] - The total number of shares issued at the establishment was 180 million, with a face value of RMB 1 per share [6][7] - The company can increase capital through various methods, including issuing shares to unspecified or specific objects, distributing bonus shares, or converting reserves into capital [7][8] Shareholder Rights and Responsibilities - Shareholders have rights to dividends, voting, supervision of company operations, and access to company documents [12][13] - Shareholders must comply with laws and the articles of association, and they cannot withdraw their capital except as legally permitted [15][16] - The company must maintain the independence of its assets and operations, ensuring that controlling shareholders do not misuse their power [16][17] Shareholder Meetings - The company holds annual and extraordinary shareholder meetings, with specific procedures for calling and conducting these meetings [48][49] - Shareholder proposals must be submitted in advance, and the company must provide adequate notice of meetings [58][59] - Decisions at shareholder meetings require a majority or supermajority vote, depending on the nature of the resolution [80][81]

Core Viewpoint - The document outlines the financial assistance management system of Hubei Hendi Pharmaceutical Co., Ltd, aiming to regulate external financial assistance, mitigate financial risks, and enhance information disclosure quality [1]. Group 1: General Principles - The system defines "external financial assistance" as the provision of funds or entrusted loans by the company and its subsidiaries, excluding certain conditions such as when lending is the main business or when the recipient is a majority-owned subsidiary [1]. - The company must protect shareholders' rights and provide financial assistance based on principles of equality, voluntariness, and fairness, with the recipient required to provide guarantees [1]. Group 2: Approval Process - Financial assistance must be reviewed by the finance department and approved by the board of directors [3]. - A minimum of two-thirds of the attending directors must agree to the financial assistance proposal, and related directors must abstain from voting [4]. Group 3: Conditions for Financial Assistance - The company cannot provide financial assistance to related parties such as directors, senior management, or controlling shareholders [2]. - Financial assistance must be documented in agreements specifying conditions, amounts, terms, and liabilities for breach [2]. Group 4: Responsibilities and Oversight - The finance department is responsible for assessing the financial health and creditworthiness of the assistance recipient before providing funds [6]. - The internal audit department will supervise the compliance of financial assistance activities [6]. Group 5: Penalties - Violations of the financial assistance regulations that result in losses or negative impacts on the company will lead to economic liability for the responsible individuals, with severe cases potentially referred to judicial authorities [7]. Group 6: Miscellaneous - The management system will be revised and interpreted by the board of directors and will take effect upon approval [8].

Core Points - The document outlines the working rules of the Compensation and Assessment Committee of Hubei Hendi Pharmaceutical Co., Ltd, established to enhance corporate governance and improve operational efficiency [1][2] - The committee is responsible for evaluating the performance of directors and senior management, as well as reviewing and proposing compensation policies [1][3] Group 1: General Provisions - The committee is a specialized body established by the board of directors, responsible for assessing the performance standards of directors and senior management [1][2] - The committee consists of three members, including two independent directors, and is elected by the board [2][3] Group 2: Responsibilities and Duties - The committee is tasked with formulating performance evaluation standards and compensation policies for directors and senior management, and must submit proposals to the board for approval [11][12] - The chairperson of the committee is responsible for convening meetings, signing reports, and representing the committee to the board [13] Group 3: Meeting Procedures - The committee must hold at least one meeting annually, with additional meetings called as necessary [15][16] - A quorum requires the presence of at least two-thirds of the committee members, and decisions are made by a majority vote [16][17] Group 4: Evaluation Process - The evaluation process for directors and senior management includes self-assessments and performance evaluations based on established criteria [23][24] - The committee may invite directors and senior management to attend meetings when necessary [24][25] Group 5: Miscellaneous Provisions - The rules are effective upon approval by the board and will be amended as necessary to comply with relevant laws and regulations [27][28] - The board is responsible for interpreting these rules [29]

General Overview - The document outlines the work guidelines for the General Manager of Hubei Hendi Pharmaceutical Co., Ltd, aiming to improve the company's governance structure in accordance with relevant laws and regulations [1] Chapter 1: General Principles - The guidelines are established based on the Company Law of the People's Republic of China and the company's articles of association [1] Chapter 2: Qualifications and Appointment Procedures - The General Manager must possess extensive knowledge in economics and management, practical experience in enterprise operations, and familiarity with relevant laws and policies [2] - The appointment of the General Manager is proposed by the Chairman and approved by the Board of Directors, while the Vice General Managers and financial officers are nominated by the General Manager and appointed by the Board [2][3] Chapter 3: Powers and Responsibilities - The General Manager is responsible for managing the company's operations, implementing board resolutions, and reporting to the Board [3] - The General Manager must adhere to laws and regulations, execute board decisions, and focus on market analysis and technological advancement [3][4] Chapter 4: Responsibilities of Other Senior Management - The Vice General Manager assists the General Manager and is responsible for specific areas of work [4] - The financial officer manages the company's financial affairs and reports to the General Manager [4] Chapter 5: Work Structure and Procedures - The company will establish functional departments as needed, with proposals for their setup or dissolution submitted by the General Manager to the Board [5] - The General Manager's office meetings are held to discuss significant management decisions, ensuring scientific and rational decision-making [5][6] Chapter 6: Reporting System - The General Manager is required to report regularly to the Board and inform the Chairman of significant operational matters [6][7] - Immediate reporting is required for critical incidents affecting the company's operations or safety [6][7] Chapter 7: Evaluation and Rewards - The Board's remuneration and evaluation committee is responsible for assessing the performance of the General Manager and other senior management [7] - Significant achievements during the term may lead to rewards, while failures may result in penalties or dismissal [7][8] Chapter 8: Supplementary Provisions - The guidelines are subject to interpretation by the Board and must comply with national laws and the company's articles of association [8][9]

Core Viewpoint - The financial management system of Hubei Hendi Pharmaceutical Co., Ltd. aims to strengthen financial management, standardize financial behavior, and protect shareholder rights, in accordance with relevant laws and regulations [1][2]. Financial Management System - The financial management system covers financial management framework, accounting management, comprehensive budget management, and accounting record management [1]. - The financial department is the center of financial management, responsible for organizing, supervising, and guiding financial work across the company and its subsidiaries [2]. - Each subsidiary must establish a financial department responsible for financial accounting and supervision, sharing responsibility for the legality and accuracy of financial reports [2][3]. - Financial personnel must possess the necessary professional capabilities and complete proper handover procedures when changing positions [3]. Financial Accounting Management - The company adheres to national accounting standards and regulations, ensuring accurate accounting records and financial reports [4]. - Financial departments must establish and improve basic financial accounting management systems to enhance efficiency and quality [4][5]. - Accounting information must reflect the true financial status and operational results, and must be timely and consistent [4][5]. Comprehensive Budget Management - Comprehensive budget management is essential for normal business operations and should involve all production and operational activities [6]. - The company has established a budget management committee, with the financial department as its executing body, to oversee budget preparation and execution [6][7]. - Budget execution periods are defined as January 1 to December 31 each year, with budget preparation occurring from November to December [7]. Asset Management - The management of monetary funds includes cash, bank deposits, and securities, with strict controls to ensure safety and compliance [8][9]. - All funds must be recorded in legal accounting books, and unauthorized financial practices are prohibited [8][9]. - The company must conduct regular cash counts and maintain accurate records of cash management [9]. Revenue, Cost, and Expense Management - Management of operating expenses and costs is conducted through budget control, ensuring all income is legally documented and accounted for [17][18]. - The company must adhere to the principle of matching revenue with costs, ensuring accurate cost accounting methods are applied [17][18]. Profit and Profit Distribution Management - The annual profit distribution plan must be approved by the board of directors and should follow a specific order of operations, including covering previous losses and allocating reserves [19][20]. - The use of reserves must comply with regulations and require board approval [20]. Financial Reporting and Analysis Management - Financial reports must accurately summarize the company's financial status and operational results, adhering to legal and regulatory requirements [19]. - Financial analysis should be based on accurate data and flexible methodologies to meet various analytical needs [19].

Core Viewpoint - The document outlines the measures and principles established by Hubei Hendi Pharmaceutical Co., Ltd. to prevent the occupation of company funds by controlling shareholders and related parties, ensuring the safety of company assets and compliance with relevant laws and regulations [1][2]. Group 1: General Principles - The purpose of the system is to create a long-term mechanism to prevent the occupation of company funds by controlling shareholders and related parties, in accordance with the Company Law of the People's Republic of China and the company's articles of association [1]. - Company directors, the audit committee, and senior management have the obligation to maintain the safety of company funds [1]. Group 2: Definitions of Fund Occupation - Fund occupation includes both operational and non-operational forms, where operational occupation arises from related transactions in procurement and sales, while non-operational occupation includes payments for wages, benefits, and other expenses on behalf of controlling shareholders [2]. Group 3: Prevention Principles - Controlling shareholders and related parties are prohibited from occupying company funds through various means, including direct or indirect loans [2]. - Related transactions with controlling shareholders must strictly adhere to the company's articles of association and relevant regulations [2]. Group 4: Responsibilities and Measures - The chairman of the company is the primary responsible person for preventing fund occupation, supported by the general manager, financial director, and board secretary [3]. - A leadership group is established for daily supervision and management of fund occupation prevention, consisting of key company executives [3]. Group 5: Monitoring and Reporting - The financial department is responsible for regular inspections and reporting on non-operational fund transactions with controlling shareholders to prevent such occurrences [4]. - Independent directors and the audit committee must review fund transactions with related parties at least quarterly to identify any irregularities [5]. Group 6: Legal and Financial Consequences - If fund occupation occurs, the company board must take protective measures such as litigation and asset freezing to mitigate losses [6]. - Directors and senior management who assist or condone fund occupation will face disciplinary actions, and the company will pursue legal responsibility for any losses incurred by investors [7].

Core Points - The internal audit system of Hubei Hendi Pharmaceutical Co., Ltd. aims to strengthen and standardize internal audit work, protect investors' rights, and ensure compliance with relevant laws and regulations [2][3] - The internal audit is an independent and objective activity that evaluates and improves the company's operations, risk status, internal control, and governance effectiveness [2][3] - The internal audit department is responsible for daily audit work and supervises the company's board, senior management, subsidiaries, and significant equity investees [4][5] Internal Audit Objectives - Ensure compliance with national laws, policies, and regulations [2] - Promote risk control within acceptable levels [2] - Improve company operations and achieve business objectives [2] Internal Audit Structure - The company has an independent internal audit department with a minimum of three full-time auditors [4][5] - The head of the internal audit department is nominated by the audit committee and appointed by the board [4] Internal Audit Responsibilities - The internal audit department is responsible for developing audit procedures, evaluating risk management, and implementing the annual audit plan [9][10] - Responsibilities include comprehensive audits, special audits, and ensuring the integrity and effectiveness of internal control systems [10][11] Audit Implementation - The audit department must submit an internal control evaluation report at least annually to the audit committee [11] - Internal control reviews focus on financial reporting and related internal control systems [11][12] Audit Authority - The internal audit department has the authority to attend relevant meetings, access management information, and request documents from relevant departments [8][9] - It can propose corrective actions for illegal activities and improve economic management [8][9] Audit Methods and Procedures - The internal audit can be conducted through on-site and off-site methods, with specific procedures for each [10][11] - Audit reports must include objectives, methods, conclusions, and recommendations [11][12] Quality Control - The internal audit department must conduct self-assessments and ensure that audit procedures are followed [12][13] - Auditors must avoid conflicts of interest and maintain professional integrity [12][13] Accountability - The audit committee and management must ensure that audit findings are utilized effectively, and corrective actions are taken for identified issues [14] - Internal auditors may be held accountable for failing to follow procedures or for misconduct [14]

Core Points - The internal control system aims to standardize company operations, enhance risk management, and protect investors' rights [1][2] - The internal control framework should be comprehensive, covering various levels including the company, subsidiaries, and business processes [5][6] - The internal control system must include specific elements such as goal setting, risk assessment, control activities, and information communication [2][3] Group 1: General Principles - The internal control system is designed to ensure the achievement of strategic goals and reduce shareholder risks [1] - The board of directors is responsible for establishing, implementing, and supervising the internal control system [1][4] - The internal control system should be complete, reasonable, and effective to improve operational efficiency and ensure legal compliance [1][4] Group 2: Internal Control Framework - The internal control system should encompass all business activities, including sales, procurement, research and development, asset management, and financial management [3][4][5] - Specific controls should be established for each business segment, tailored to the company's industry and operational characteristics [5][6] - The internal control system must also include management policies that span all business activities, such as budget management and information disclosure [5][6] Group 3: Risk Management - The company should identify and assess internal and external risks that may impact the achievement of its goals [2][6] - Risk management strategies should be selected based on the company's risk tolerance and preferences [2][6] - A crisis management control system should be established to address unique risks associated with the industry [6][7] Group 4: Supervision and Evaluation - Regular and irregular checks on the implementation of the internal control system are required to identify deficiencies and improve effectiveness [8][10] - The internal audit department is responsible for daily supervision and must report directly to the board of directors [8][10] - The board should evaluate the internal control system based on audit reports and disclose findings in annual reports [11][12]

Core Points - The document outlines the independent director special meeting system for Hubei Hendi Pharmaceutical Co., Ltd, aiming to enhance corporate governance and the role of independent directors [1][4] - Independent directors are defined as those who do not hold other positions in the company and have no direct or indirect interests that could affect their independent judgment [1][2] Meeting Rules - A special meeting of independent directors requires the presence of more than half of the independent directors to be valid [2] - Meetings are primarily held in person but can also be conducted via video, phone, or other communication methods if necessary [2] - A majority of independent directors must elect one to convene and preside over the meeting; if the convener is unable to perform their duties, two or more independent directors can convene and elect a representative [2][3] - Independent directors must attend meetings in person or review materials in advance and delegate their voting rights if unable to attend [2][3] Voting and Decision-Making - Voting at the special meeting is conducted on a one-vote-per-person basis, with various methods including show of hands, written votes, and communication votes [2] - Certain matters require approval from the independent directors' special meeting before being submitted to the board, including related party transactions and changes to commitments [2][3] Special Powers and Responsibilities - Independent directors can exercise special powers, such as hiring external agencies for audits or consultations, proposing temporary shareholder meetings, and calling board meetings, but these actions must be approved by the special meeting [3] - The company must disclose any inability to exercise these powers and provide reasons [3] Meeting Records and Support - Meeting records must be created, detailing the date, attendees, resolutions, and voting results, and must be retained for at least ten years [5] - The company is responsible for providing necessary support and resources for the independent directors to fulfill their duties [5][6] Annual Reporting - Independent directors must submit an annual report to the shareholders' meeting, detailing their participation in special meetings [6] Miscellaneous - Any matters not covered by this system will follow relevant laws, regulations, and the company's articles of association [6] - Amendments to this system require board approval and take effect upon approval [6]