Shareholder return · Planning
On October 16, 2017, the company held its second extraordinary general meeting resolution of the year, which reviewed and approved the “Proposal on the ‘Articles of Association of Nanjing Chervon Auto Precision Technology Co., Ltd.’ (draft) Applicable to the Company's IPO and Listing” and relevant documents of the “Proposal on the Three-year Shareholder Dividend Returns Plan after IPO and Listing” by the board of directors. The profit distribution policy and shareholder return plan after listing are as follows:
The company focuses on long-term and sustainable development, comprehensively considers the company's future development planning, operating conditions, profitability and other important factors, establishes a sustainable, stable and scientific return planning and mechanism for investors, and makes institutional arrangements for profit distribution, to ensure the continuity and stability of the profit distribution policy. In the case that the fund demand of the normal production and operation is met, the company shall implement a positive, continuous and stable profit distribution method, give priority to cash dividends, and pay attention to the reasonable investment returns for investors.
The company distributes dividends in a combination of cash, stocks, or cash and stocks, giving priority to the cash form.
Under the conditions that the company's net profit in the audited statement and accumulated undistributed profit are both positive, and that the company's cash flow can meet its normal operation and sustainable development, the company should carry out cash dividends.
When the above cash dividend conditions are met, the company shall conduct a cash dividend every year. The total cash dividends of the company during the year (including the cash dividends allocated in the interim period) shall not be less than 20% of the net profit attributable to shareholders of the listed company in the audited consolidated statement for the current year. According to the company's profitability and capital demand status, interim cash dividends can also be made upon the proposal of the company's board of directors and the approval by the shareholder meeting.
In the case that the company is in good operating condition; that the board of directors believe there being a mismatching between the asset scale, the operation scale, etc. and the equity scale; and that issuing stock dividends is beneficial to the interests of the company as a whole and all shareholders, a distribution plan for stock dividends can be raised, as long as the above-mentioned cash dividends conditions are satisfied. The use of stock dividends for profit distribution shall be based on the reasonable cash dividends returns for shareholders and on the maintenance of an appropriate equity scale. It shall comprehensively take into consideration the true and reasonable factors such as the company's growth and the dilution of net assets per share.
The board of directors shall comprehensively consider the characteristics of the industry, the stage of development, its own business mode, the level of profitability, and whether there are major capital expenditure arrangements, etc.; shall distinguish the following situations; and shall come up with a differentiated cash dividend policy in accordance with the procedures stipulated in the company's arti
1. If the company's development stage is mature and there is no major capital expenditure arrangement, when the profit distribution is made, the cash dividend shall account for no less than 80% of the profit distribution;
2. If the company's development stage is mature and there are major capital expenditure arrangements, when the profit distribution is made, the cash dividend shall account for no less than 40% of the profit distribution.
3. If the company's development stage is growing and there are major capital expenditure arrangements, when the profit distribution is made, the cash dividend shall account for no less than 20% of the profit distribution.
If the company's development stage is difficult to distinguish but there are major capital expenditure arrangements, it can be handled in accordance with the provisions of the preceding paragraph.
1. The profit distribution plan is drawn up by the company's management and then submitted to the board of directors for review. The board of directors shall fully discuss the rationality of the profit distribution plan while the independent directors shall express their explicit opinions on the plan. After being reviewed and approved by the board of directors, the profit distribution plan will be submitted to the general meeting of shareholders for deliberation.
Independent directors may gather opinions from minority shareholders, propose dividends plans, and submit them directly to the board of directors for deliberation.
Before the shareholders' meeting deliberates on the specific plan of cash dividend, the company should actively communicate and exchange with the shareholders, especially the minority ones, through various channels. The company should fully listen to the opinions and appeals of the minority shareholders and timely respond to their concerns.
2. If the company's profit for the year and the accumulated undistributed profit are positive, but the cash profit distribution plan is not proposed, the independent directors shall express an explicit opinion, and fully explain in the annual report the reasons for the non-dividend and the uses for the retained funds that are not used for dividends. A disclosure on the company's designated media is needed. The board of supervisors shall supervise the details and procedures for the board of directors to formulate the company's profit distribution plan.
1. The company should re-review this plan at least every three years, make corresponding modifications according to the company's immediate profit distribution policy and determine the shareholder return plan for the period. The board of directors should incorporate specific business data, fully consider the company’s current profit scale, the cash flow status, the stage of development and the current capital demand, and form an annual or interim dividend plan, which shall be submitted to the shareholders' meeting for deliberation after the board of directors review and approve it. The company's shareholders, independent directors and the board of supervisors shall supervise the shareholder dividend returns plan that is implemented by the board of directors.
2. The company shall formulate the three-year shareholder returns plan after listing. The board of directors shall submit a proposal to the shareholders' general meeting for voting. The independent directors shall express their independent opinions and submit them to the shareholders' meeting for deliberation. The proposal must be approved by more than two-thirds of the voting rights held by shareholders attending the general meeting.
3、If it is necessary to adjust the profit distribution policy due tochanges in external business environment or the internal operating conditions, protecting the shareholders' rights and interests will be taken as the starting point, and the reasons will be discussed and explained in detail in the proposal of the shareholders' meeting. The adjusted profit distribution policy shall not violate the relevant provisions of the China Securities Regulatory Commission and the stock exchange; the proposal for adjusting the profit distribution policy shall be submitted to the shareholders' general meeting for approval after the review and approval by the board of directors and the board of supervisors, and the independent directors shall express independent opinions on the proposal. When the board of directors deliberate to formulate or revise the profit distribution related policies, the proposal must be approved by a majority vote of all directors before it can be submitted to the shareholders meeting for deliberation. When the shareholders' meeting deliberates to formulate or revise the profit distribution related policies, the proposal must be approved by more than two-thirds of the voting rights held by the shareholders attending the shareholders' meeting.
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