Chapter VIII Financial Accounting System, Profit Distribution and Auditing
Section 1 Financial Accounting System
Article 166 The company shall formulate the company’s financial accounting system in accordance with the laws, administrative regulations and the provisions of relevant state departments.
Article 167 The company shall submit annual financial accounting reports to the China Securities Regulatory Commission and the stock exchange within 4 months from the end of each fiscal year, starting from the end of 6 months before each fiscal year. To submit semi-annual financial and accounting reports to China Securities Regulatory Commission agencies and stock exchanges within the month, and to send institutions and securities transactions to the China Securities Regulatory Commission within one month from the end of the first three months and the first nine months of each fiscal year. The quarterly financial report was submitted.
The above financial and accounting reports are prepared in accordance with relevant laws, administrative regulations and departmental rules.
Article 168 In addition to the statutory accounting books, the company will not create separate accounting books. The company’s assets do not open account accounts in the name of any individual.
Article 169 When the company distributes the after-tax profits of the year, it shall withdraw 10% of the profits to be included in the statutory reserve fund of the company. If the company's statutory accumulation fund is more than 50% of the registered capital of the company, it may not be withdrawn.
If the statutory reserve fund of the company is not sufficient to make up for the loss in the previous year, before the statutory reserve fund is drawn according to the provisions of the preceding paragraph, it shall be used to make up for the loss with the profits of the current year.
After the company withdraws the statutory reserve from the after-tax profits, it can also withdraw any discretionary reserve fund from the after-tax profits after being resolved by the shareholders' meeting.
After the company makes up the losses and the remaining profits after the withdrawal of the provident fund, it is distributed according to the proportion of the shares held by the shareholders, except that the regulations do not allocate according to the percentage of shares held. Gold Leaf Charter
If the general meeting of shareholders violates the provisions of the preceding paragraph and the company distributes profits to the shareholders before making up for losses and withdrawing statutory reserves, the shareholders must return the profits distributed in violation of the rules to the company.
The company’s shares held by the company do not participate in the distribution of profits.
Article 170 The company's provident fund shall be used to make up for the losses of the company, expand the company's production and operations, or be converted into additional company capital. However, the capital reserve fund will not be used to make up for the loss of the company. When a statutory reserve fund is converted into capital, the retained reserve fund will not be less than 25% of the registered capital of the company before the transfer.
Article 171 The company’s profit distribution policy is:
(1) The company attaches great importance to safeguarding the interests of investors. The profit distribution should fully consider the reasonable return to investors. The profit distribution policy should maintain continuity and stability; when the company's operating environment undergoes major changes or strategic development needs, it can adjust Profit distribution policy; The Board of Directors shall fully demonstrate the adjustment plan from the perspective of safeguarding the legitimate rights and interests of shareholders, especially small and medium investors, and fully communicate and communicate with the small and medium shareholders before the shareholders' meeting; the adjustment plan must be attended by the general meeting of shareholders. Over two-thirds of the voting rights held by the shareholders (including shareholders' representatives) passed, independent directors should express their independent opinions.
(b) The company may use cash or stocks to distribute dividends and may make mid-term cash dividends.
(3) The company shall make cash dividends on the premise that the company's cash flow meets normal production and operation and long-term development. The company’s profit accumulated in cash over the last three years should not be less than 30% of the annual average distributable profit realized in the last three years.
(4) If the company is profitable but the board of directors fails to propose a cash dividend distribution plan, or if the dividend cannot reach the aforementioned proportion, the board of directors shall make a special statement to the general meeting of shareholders and explain in the periodic report the reasons for the non-cash dividends and the reasons for not using it. The dividends shall be retained for the purpose of the company; independent directors shall express their independent opinions on this, and at the same time issue an independent opinion on the use of retained funds in the previous year; the opinions of the independent directors shall be disclosed.
(5) The net debt ratio of the company at the end of the year exceeds 70%, or the net increase in cash and cash equivalents is negative, and no cash dividends may be made.
(6) Profits formed from non-recurring profits and losses of the company, capital reserves formed by changes in fair value, and undistributed profits shall not be used for cash dividends.
(7) The specific annual profit distribution plan will be formulated by the board of directors according to the company's operating conditions, and will be submitted to the East meeting of the company's shares of the company's Articles of Association for review.
Article 172 After the shareholders' general meeting of the company makes a resolution on the profit distribution plan, the company's board of directors must complete the distribution of dividends (or shares) within 2 months after the shareholders' meeting.
Article 173 The company’s profit distribution policy is:
(i) Same-shares with the same rights and interests;
(b) Distribution of profits in proportion to the shares held by shareholders.


Section II Internal Audit
Article 174 The company implements an internal auditing system, employs full-time auditors, and conducts internal audit supervision on the company's financial revenue and expenditure and economic activities.
Article 175 The internal audit system of the company and the duties of the auditors shall be implemented after the approval of the board of directors. The person in charge of the audit is responsible to the board of directors and reports on his work.


Section 3 Appointment of Accounting Firms
Article 176 The company employs an accounting firm that obtains “qualification for securities-related business” to conduct auditing of accounting statements, verification of net assets, and other related consulting services. It can be renewed for a one-year period.
Article 177 The appointment of an accounting firm by the company must be decided by the general meeting of shareholders, and the board of directors must not appoint an accounting firm before the shareholders meeting.
Article 178 The company guarantees to provide certified accounting firms with true and complete accounting vouchers, accounting books, financial accounting reports and other accounting information, and may not refuse, hide, or misrepresent.
Article 179 The audit fees of the accounting firm shall be determined by the general meeting of shareholders.
Article 180 When a company dismisses or ceases to reappoint an accounting firm, it shall notify the accounting firm 30 days in advance. The shareholders' meeting of the company allows the accounting firm to state its opinions when dismissing the accounting firm to vote.
Where an accounting firm submits a resignation, it shall explain to the general meeting of shareholders whether the company is improper.