ZHEJIANG ZHENYUAN(SZ:000705) Zheng Quan Zhi Xing·2025-06-06 08:15Core Viewpoint - The document outlines the management system for subsidiaries of Zhejiang Zhenyuan Co., Ltd., emphasizing the need for orderly, standardized, and efficient operations while controlling investment risks and protecting the rights of the company and its investors [1]. Group 1: General Principles - The management of subsidiaries follows principles of strategic unity and collaborative development, ensuring that subsidiary strategies align with the overall company strategy [2]. - Subsidiaries maintain independent daily operations, allowing them to establish their internal management structures while ensuring compliance with regulatory requirements [2]. - Major transactions or matters that could significantly impact the company or subsidiaries require decision-making and approval from the company [2]. Group 2: Corporate Governance - Subsidiaries must establish governance structures and internal management systems in accordance with relevant laws and regulations [3]. - Subsidiaries are required to hold shareholder meetings and board meetings as per legal requirements, with specific timelines for annual meetings [4]. - Major transactions must be reviewed and approved by the subsidiary's board or shareholders, especially those involving significant investments or contracts [4][5]. Group 3: Personnel and Assessment Management - The company appoints or recommends directors, supervisors, and senior management for subsidiaries, ensuring compliance with subsidiary charters [6]. - A performance assessment mechanism is established for subsidiaries, linking responsibilities and rewards to the performance of subsidiary leaders [7]. - Any failure by subsidiary management to fulfill their responsibilities may lead to disciplinary actions and potential legal liabilities [7]. Group 4: Financial Management - Subsidiaries must adhere to a unified accounting system and establish financial management practices in line with company policies [8]. - The company’s financial management department oversees subsidiary financial activities, including budget preparation and financial reporting [8]. - Subsidiaries are prohibited from applying for bank credit without company approval, ensuring centralized financial control [8][9]. Group 5: Business Control - The company guides subsidiaries in formulating annual business plans and budgets, which must be approved by the company [9]. - Subsidiaries are not allowed to provide external guarantees or donations without prior approval from the company [9][10]. - Any significant transactions outside the approved scope may result in penalties for responsible parties [10]. Group 6: Audit Supervision - The company conducts regular audits of subsidiaries to ensure compliance with laws and internal regulations [11]. - Audits cover various aspects, including legal compliance, management practices, and financial performance [11]. - Subsidiaries must cooperate with audits and provide necessary documentation [11]. Group 7: Information Reporting and Disclosure Management - Subsidiaries must comply with information disclosure regulations and maintain confidentiality of undisclosed information [12]. - Designated personnel are responsible for communication between the company and subsidiaries regarding information management [12]. - Accurate and complete reporting of information is mandatory, with strict penalties for any misrepresentation [12][13]. Group 8: Supplementary Provisions - The company’s relevant departments are tasked with refining management details and processes based on the established system [13]. - Any matters not covered by the system will be governed by applicable laws and company regulations [13]. - The board of directors is responsible for interpreting and amending the management system [13].