Security Code: 603950 Security Abbreviation: Changyuan Donggu Announcement No.: 2021-006

 

Xiangyang Changyuan Donggu Industrial Co., Ltd.

Announcement of Resolutions Adopted at the Eighteenth Meeting of the Third Board of Directors

 

I. Details of the Board Meeting

(1) The convening of the 18th Meeting of the Third Session of Xiangyang Changyuan Donggu Industrial Co., Ltd. (hereinafter referred to as the “Company”) (hereinafter referred to as the “Current Meeting”) complies with the provisions of applicable laws, administrative regulations, departmental rules, normative documents, and the Company’s Articles of Association.

(2) The Company issued the notice and materials for this meeting by email on March 12, 2021.

(3) The Company convened this meeting on March 22, 2021, in Conference Room No. 1, using a hybrid format combining in-person attendance with written voting.

(4) Eleven directors were expected to attend this board meeting, and all eleven directors attended. Among them, nine directors, including Li Zuoyuan and Li Xianfeng, participated in the meeting via written (remote) voting.

(5) This meeting was chaired by Chairman Li Zuoyuan. The Company’s Board Secretary, Securities Affairs Representative, all Supervisors, and other senior management personnel attended the meeting as non-voting observers.

II. Review of the Board Meeting

Upon review by the directors present at the meeting, the following proposals were approved. ：

Proposal 1: Consideration of the “Proposal on the Full Text and Summary of the Company’s 2020 Annual Report”

For details, please refer to the “Changyuan Donggu 2020 Annual Report” and the “Changyuan Donggu 2020 Annual Report Summary” published on the same day on the website of the Shanghai Stock Exchange (www.sse.com.cn).

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 2: Consideration of the “Proposal on the Board of Directors’ Work Report for 2020”

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 3: Consideration of the “Proposal on the 2020 Annual Report on the Performance of Duties by Independent Directors”

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 4: Consideration of the “Proposal on the Report Regarding the Performance of Duties by the Audit Committee of the Board of Directors for the Year 2020”

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

 

Proposal 5: Consideration of the “Proposal on the Company’s 2020 Annual Financial Closing Report and 2021 Annual Financial Budget Report”

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 6: Consideration of the “Proposal on the Company’s 2020 Profit Distribution Plan”

In light of the cash dividend distributed in the first half of 2020, as approved by the Board of Directors and the Shareholders’ Meeting, the dividend amount represented 88.33% of the net profit attributable to shareholders for 2020, in compliance with the Company’s Articles of Association and the 2018–2021 Shareholder Return Plan. The Company places great importance on providing investors with long-term, stable returns. Taking into account its future development plans and the need to fund capital expenditures, maintain financial soundness and autonomy, enhance risk resilience, and achieve sustainable, stable, and healthy growth—thereby better safeguarding the long-term interests of all shareholders—the Company will not distribute profits, issue bonus shares, or transfer capital reserves to increase share capital for the year 2020.

The company’s independent directors issued an independent opinion on the proposal, approving the company’s 2020 profit distribution plan. The full text of the announcement is available on the website of the Shanghai Stock Exchange.

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 7: Consideration of the “Proposal on the Special Report Regarding the Deposit and Use of Funds Raised in 2020”

For detailed information, please refer to the Company’s “Special Report on the Deposit and Actual Use of Funds Raised in 2020” (Announcement No.: 2021-009), which was disclosed on the same day on the website of the Shanghai Stock Exchange (www.sse.com.cn).

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

 

Proposal 8: Consideration of the “Proposal on the Company’s 2020 Internal Control Evaluation Report”

For detailed information, please refer to the “Report on the Company’s 2020 Internal Control Evaluation,” which was disclosed by the company on the same day on the website of the Shanghai Stock Exchange (www.sse.com.cn).

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

 

Proposal 9: Consideration of the “Proposal on Engaging an Accounting Firm and an Internal Control Audit Institution for 2021”

The Company has agreed to re-appoint Zhongshen Zhonghuan Certified Public Accountants (Special General Partnership) as its accounting firm and internal control auditor for the year 2021, with total audit fees of RMB 770,000—RMB 500,000 for the annual report audit and RMB 270,000 for the internal control audit—remaining unchanged from the previous period.

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 10: Consideration of the “Proposal on Approving the Annual Remuneration of the Company’s Directors, Supervisors, and Senior Management”

During the deliberation of the proposal, directors Li Zuoyuan, Li Congrong, Li Xianfeng, Feng Shengzhong, and Chen Xuzhou abstained from voting.

Voting result: [6] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

The proposal regarding directors’ remuneration for 2021 will be submitted to the Company’s 2020 Annual General Meeting for consideration.

 

Proposal 11: Consideration of the “Proposal Regarding the Company’s Application for a Comprehensive Credit Line for 2021”

2021 For the year, the Company and its subsidiaries intend to apply to various financial institutions for a comprehensive credit line not exceeding RMB 1.9 billion (subject to the actual credit limits approved by the banks). The types of credit facilities include various loans, bank acceptance bills, bill discounting, letters of credit, guarantees, and other forms of financing.

The Company will prudently and flexibly utilize the relevant credit lines in an efficient manner. The aforementioned credit limits do not represent the Company’s actual financing amount; the specific financing amount will be determined based on the actual needs of the Company and its subsidiaries. The validity period of the above‑mentioned credit line application shall commence on the date of approval by the shareholders’ meeting and expire on the date of the next annual shareholders’ meeting.

To enhance operational efficiency, the Board of Directors proposes to seek authorization from the General Meeting of Shareholders for the Chairman to, within the aforementioned limits and based on actual funding needs, exercise full authority to handle all related matters and to sign the relevant contracts and documents.

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 12: Consideration of the “Proposal on Amending the Articles of Association and Processing Industrial and Commercial Change Registration”

For details, please refer to the “Announcement of Xiangyang Changyuan Donggu Industrial Co., Ltd. on Amending the Articles of Association” and the “Articles of Association of Xiangyang Changyuan Donggu Industrial Co., Ltd.” published on the same day on the website of the Shanghai Stock Exchange (www.sse.com.cn). (Announcement No.: 2021-010)

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 13: Consideration of the “Proposal on Nominating Candidates for Directors to the Company’s Fourth Board of Directors”

Given that the term of the Company’s third board of directors expired on March 19, 2021, in accordance with the Company Law, the Articles of Association, and other relevant regulations, the Nomination Committee of the Board of Directors has nominated Li Zuoyuan, Li Xianfeng, Li Congrong, Feng Shengzhong, Chen Xuzhou, and Huang Cheng as candidates for directors of the Company’s fourth board of directors. The term of office shall be three years, commencing from the date of approval by the Company’s shareholders’ meeting. Resumes of the candidates are attached hereto.

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 14: Consideration of the “Proposal on Nominating Candidates for Independent Directors to the Company’s Fourth Board of Directors”

In view of the expiration of the term of office of the Company’s third board of directors on March 19, 2021, and in accordance with the Company Law, the Articles of Association, and other relevant regulations, the Nomination Committee of the Board of Directors has nominated Shi Jun, Jia Huafang, and Fu Yongling as candidates for independent directors of the Company’s fourth board of directors. Their term of office shall be three years, commencing from the date approved at the Company’s shareholders’ meeting. Resumes of the candidates are attached hereto. The independent director candidates, Shi Jun, Jia Huafang, and Fu Yongling, have all obtained certificates of qualification for independent directors.

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 15: Consideration of the “Proposal Regarding the Intended Signing of a Project Investment Contract with the Management Committee of Shiyan Industrial New Zone”

For details, please refer to the <Announcement of Xiangyang Changyuan Donggu Industrial Co., Ltd. Regarding the Company’s Plan to Sign the “Project Investment Contract” with the Management Committee of Shiyan Industrial New Zone>, published on the same day on the website of the Shanghai Stock Exchange (www.sse.com.cn). (Announcement No.: 2021-012)

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

This proposal still needs to be submitted to the shareholders’ meeting for consideration.

 

Proposal 16: Consideration of the “Proposal on Convening the 2020 Annual General Meeting of Shareholders of Xiangyang Changyuan Donggu Industrial Co., Ltd.”

The company plans to hold the 2020 Annual General Meeting of Shareholders at 2:00 p.m. on April 13, 2021, in Conference Room No. 1 of Changyuan Donggu, No. 396 Diamond Avenue, Xiangzhou District, Xiangyang City. For detailed information, please refer to the “Notice of Xiangyang Changyuan Donggu Industrial Co., Ltd. on Convening the 2020 Annual General Meeting of Shareholders” (Announcement No.: 2021-008), which was disclosed on the same day on the website of the Shanghai Stock Exchange (www.sse.com.cn).

Voting results: [11] votes in favor, [0] votes against, [0] abstentions; the motion was adopted.

The above 1、2、3、5、6、9、10、11、12、13、14、15 This proposal must be submitted to the company. 2020 Approved at the Annual General Meeting 。

 

This is hereby announced.

Xiangyang Changyuan Donggu Industrial Co., Ltd.

Board of Directors

2021 March 22

 

 

Resumes of Candidates for Directors on the Fourth Board of Directors

Li Zuoyuan Mr. Li Zuoyuan, born in 1948, is a Hong Kong resident with permanent residency in both Hong Kong and New Zealand, and holds a bachelor’s degree. From July 1979 to May 1983, he served as an engineer at the Second Foundry Plant of Dongfeng Motor Group Co., Ltd.; from June 1983 to June 1988, he was Head of Production and Engineering at the same plant. In July 1988, Mr. Li began establishing his own business; in January 1993, he founded Shiyan Changyuan; and in December 2001, he established Changyuan Limited. He currently serves as Chairman of the company, Director of Changyuan Economic & Trade, Director of Langhong Investment, Executive Director of Yuantailong, Chairman and Executive Director of Xingyuan Power, Director of Ruimandi, Director of Energy Power, Director of Hong Kong Zansheng, Director of Hong Kong Xingyuan, Director of Langhong Mechanical & Electrical, Supervisor of Langtong Power, Director of Norman, Director of Kanghao Mechanical & Electrical, Director of Kanghao Power, Director of Cummins Power, Chairman of Dongkang Power, Chairman of Roller Technology, Chairman of Wuhan Beiwo De, Supervisor of Dongxin Hengrui, Executive Director of Langhong Transportation, Director of Langyitong Transportation, Chairman of Xiangyang Langhong Heating, Chairman of Chongqing Kanghao, Director of Xingyuan Kanghao, Chairman of Beiwo De Gucheng, Director of Xingyuan Services, and Executive Director of Langhong Services. He holds 92,872,828 shares in the company and has never been subject to penalties by the China Securities Regulatory Commission or any other relevant authorities.

Li Dangerous peak Mr. Li Xianfeng, born in 1971, is a Chinese national with no overseas permanent residency and holds an associate degree. From December 1993 to October 1994, he worked at the Final Assembly Plant of Dongfeng Motor Corporation (the Final Assembly Plant of the Second Automobile Works). From November 1994 to February 2001, he served as Sales Manager at Shiyan Changyuan. From March 2001 to November 2017, he held the positions of Director and General Manager of the company, and since December 2017, he has been a Director. Currently, Mr. Li also serves as a director of Hongtu Growth Venture Investment Co., Ltd. He holds 12,984,840 shares of the company and has not been subject to any penalties by the China Securities Regulatory Commission or other relevant authorities.

Li Congrong Ms., born in 1969, a permanent resident of Hong Kong, China, holds an associate degree. From July 1993 to December 1995, she served as a physician at the Power Equipment Factory of Dongfeng Motor Corporation; from January 1996 to November 2001, she was a manager at Shiyan Changyuan; from December 2001 to November 2017, she held the position of Deputy General Manager of the company; and since December 2017, she has been a Director and General Manager of the company. She holds 12,984,840 shares of the company and has not been subject to any penalties by the China Securities Regulatory Commission or other relevant authorities.

Feng Shengzhong Mr. Feng Shengzhong, born in 1969, is a Chinese national with no overseas permanent residency and holds a junior high school education. From January 1995 to October 2001, he served as Head of the Comprehensive Management Department at the Shiyan Changyuan Branch; from November 2001 to September 2011, he held the same position at Changyuan Co., Ltd.; from October 2011 to November 2017, he was Deputy General Manager and Board Secretary of the company; and since December 2017, he has been a Director and Deputy General Manager. Currently, Mr. Feng also serves as a supervisor at Xiangyang Kaiyun Mechanical & Electrical Co., Ltd. He holds 483,260 shares of the company and has not been subject to any penalties by the China Securities Regulatory Commission or other relevant authorities.

Chen Xuzhou Mr. Chen Xuzhou, born in 1968, is a Chinese national with no overseas permanent residency and holds an associate degree. From March 1991 to December 1996, he worked at China Machinery Installation Company No. 2; from January 1997 to November 2001, he was employed at Shiyan Changyuan; and from December 2001 to October 2011, he served successively as Head of the Production Department and then Head of the Quality Department at Changyuan Limited. From November 2011 to April 2013, he held the position of Deputy Director of the After-Sales Service Department at Changshu Nait Precision Tools Co., Ltd. Since July 2013, he has held various positions within the company, including Director of Quality, Deputy Director of the Manufacturing Department, Deputy Director of the Quality Technology Department, and Vice General Manager. Mr. Chen currently serves as a director, vice general manager, and head of the Quality Technology Department. He has participated in the development and implementation of multiple product patents for the company and contributed to the research and development of patents such as “A Double-Angle Oblique Hole Machining Fixture for Large Engines,” “An Electromagnetic Chuck Device for Fixing Oil Distribution Plates During Machining,” and “An Automatic Centering Fixture for Oil Distribution Plates.” He is one of the inventors and key participants in several of the company’s patented technologies. He holds 60,000 shares of the company and has not been subject to any penalties by the China Securities Regulatory Commission or other relevant authorities.

Huang Cheng Mr., born in 1983; Chinese nationality, no overseas permanent residency, bachelor’s degree. From October 2006 to April 2012, he worked at Xiangfan Changyuan Donggu Industrial Co., Ltd.; from April 2012 to October 2012, he worked at Beijing Changyuan Langhong Technology Co., Ltd., serving as Head of the Marketing Department; from October 2012 to the present, he has successively held the positions of Head of the Marketing Department, Head of the Marketing and Procurement Department, and Deputy General Manager at the company. He holds 84,000 shares of the company and has not been penalized by the China Securities Regulatory Commission or other relevant authorities.

 

Resumes of Independent Director Candidates for the Fourth Board of Directors

Shi Jun Mr. [Name], a Chinese national from Xiangyang, Hubei Province, holds no foreign permanent residency. Born in 1977, he is a member of the China National Democratic Construction Association and an associate professor at Xiangyang Vocational and Technical College. He holds a master’s degree in economics from Zhongnan University of Economics and Law, is a non-practicing member of the Chinese Institute of Certified Public Accountants, and was a visiting scholar with the Ministry of Education. He is recognized as a leading accounting professional at both the provincial and municipal levels in Hubei, serves as director of the Xiangyang PPP (Public-Private Partnership) Research Institute, is a provincial-level distinguished educator, and leads one of the first provincial vocational education skill master studios for accounting. He is also a member of the CPPCC Committee of Xiangcheng District, Xiangyang City, and a member of the Xiangyang Intellectuals Association. Currently, he concurrently serves as an independent director of E’xin Diamond Technology Co., Ltd., Xiangyang International Land Port Investment Holding Co., Ltd., and Xiangyang Automotive Bearing Co., Ltd. He does not hold shares in any of these companies and has not been subject to penalties by the China Securities Regulatory Commission or other relevant authorities.

Jia Huafang Ms., Chinese nationality, from Xiangyang, Hubei Province, without any foreign permanent residency. 1962 Born in July, holds a master’s degree; member of the Xiangyang Municipal Committee of the Jiusan Society; certified public accountant and registered tax advisor; associate professor of accounting and auditing at the School of Economics and Management, Hubei University of Arts and Science. Previously served as teaching assistant and lecturer at Hubei Textile University; lecturer and then associate professor of accounting and auditing in the Department of Economics and Trade at the former Xiangfan College; associate professor at the School of Economics and Law, Hubei University of Arts and Science; secretary-general of the Education Development Foundation and director of the Audit Office; chief financial officer of the university’s asset investment company; and project consultant for the Xiangyang Municipal Bureau of Science and Technology. Currently an associate professor at the School of Economics and Law, Hubei University of Arts and Science, and chief financial officer of the Huazhong University of Science and Technology (Xiangyang) Industrial Research Institute. , does not hold any shares of the company and has not been penalized by the China Securities Regulatory Commission or other relevant authorities.

Fu Yongling Mr. [Name], born in 1966, is a Chinese national with a postgraduate degree and a doctoral degree, and does not hold permanent residency in any foreign country. He has previously served as Deputy Director of the Department of Automation at Beihang University, Deputy Director of the Science and Technology Office at Beihang University, Senior Visiting Scholar at the College of Engineering, Florida State University, USA, Visiting Scholar at INSA University/IMAGINE, France, and Professor at the School of Automation, Beihang University. He currently holds the positions of Professor at the School of Mechanical Engineering and Automation, Beihang University; Independent Director at Qingdao Huijintong Power Equipment Co., Ltd.; and Deputy Director of the Aerospace Servo Drive and Transmission Technology Laboratory.