Investor Relations
Lijun Pharmaceutical Group Co., Ltd. Profit Distribution Policy
Release time:
2017-08-08
According to the Articles of Association of Lijuzhu Pharmaceutical Group Co., Ltd. Article 224 The company's profit distribution policy is as follows:
(1) The company's profit distribution should focus on reasonable investment returns for shareholders while also considering the company's sustainable development, and strive to maintain the continuity and stability of the distribution policy.
(2) The company may distribute profits in cash, stock, a combination of cash and stock, or other methods permitted by laws and regulations.
(3) The company generally implements profit distribution on an annual basis, but under conditions that allow, the company may conduct mid-term cash dividends.
(4) The company should actively adopt cash dividends based on cash flow meeting normal operations and long-term development, and ensure that the cumulative profits distributed in cash over the last three years are not less than the average distributable profits achieved in the last three years.30%The specific cash dividend ratio for each year shall be proposed by the company's board of directors based on relevant regulations and the company's operating conditions for that year, and shall be reviewed and decided by the company's shareholders' meeting.
The company should comprehensively consider various factors such as industry characteristics, development stage, its own business model, profitability level, and investment expenditures, distinguish the following situations, and propose differentiated cash dividend policies in accordance with legal procedures:
1If the company is in a mature development stage and has no significant capital expenditure arrangements, the cash dividend proportion in this profit distribution should reach at least80%;
2If the company is in a mature development stage and has significant capital expenditure arrangements, the cash dividend proportion in this profit distribution should reach at least40%.
3If the company is in a growth development stage and has significant capital expenditure arrangements, the cash dividend proportion in this profit distribution should reach at least20%.
(5) The company shall implement cash dividends only if the following conditions are met:
1The distributable profits achieved by the company in the current year (i.e., the after-tax profits remaining after offsetting losses and extracting reserves) are positive;
2The auditing agency issues an audit report with standard unqualified opinions on the company's financial report for the current year;
(6) Conditions for the company to issue stock dividends: Under the condition of meeting the implementation of cash dividends, if the company's operating income and net profit grow rapidly, and the board of directors believes that the company's capital scale and equity structure are reasonable, it may propose a plan for issuing stock dividends in addition to proposing a cash dividend distribution plan.
(7) Decision-making procedures for profit distribution policies
1The company's profit distribution plan shall be proposed by the company's management and board of directors in conjunction with profitability, funding needs, and shareholder return planning, and submitted to the shareholders' meeting for approval after being reviewed and approved by the board of directors. Independent directors should independently express opinions on the profit distribution plan.
When formulating specific cash dividend plans, the board of directors should carefully study and demonstrate the timing, conditions, minimum ratio, adjustment conditions, and decision-making procedure requirements for the company's cash dividends, and independent directors should express clear opinions.
Independent directors may solicit opinions from small and medium-sized shareholders, propose dividend proposals, and submit them directly to the board of directors for review.
2Before the shareholders' meeting reviews the specific cash dividend plan, the company should actively communicate and engage with shareholders, especially small and medium-sized shareholders, through various channels, fully listen to the opinions and demands of public shareholders, and promptly respond to the concerns of shareholders.
When the shareholders' meeting reviews the specific cash dividend plan, it should fully listen to the opinions and demands of public shareholders, and the board of directors, independent directors, and eligible shareholders may solicit their voting rights at the shareholders' meeting.
3If the company meets the conditions for implementing cash dividends but does not propose a cash dividend plan, the management must submit a detailed explanation to the board of directors, including the reasons for not distributing dividends, the purposes and usage plans for the funds retained by the company that were not used for dividends, and independent directors should express independent opinions on the profit distribution plan and disclose them publicly, and after being reviewed and approved by the board of directors, submit it to the shareholders' meeting for voting by special resolution. In addition to the on-site meeting, the company should also provide shareholders with an online voting platform when convening the shareholders' meeting.
4The company shall strictly implement the cash dividend policy determined by the articles of association and the specific cash dividend plan approved by the shareholders' meeting. If the company needs to adjust or change the profit distribution policy due to significant changes in the external operating environment or its own operating conditions, it should be resolved by the board of directors after detailed demonstration, independent directors should express independent opinions and disclose them publicly, and then submit it to the shareholders' meeting for voting by special resolution.
(8) The company should disclose in detail the formulation and implementation of the cash dividend policy in the annual report and provide special explanations for the following matters:
1Whether it complies with the provisions of the articles of association or the requirements of the shareholders' meeting resolution;
2Whether the dividend standards and ratios are clear and explicit;
3Whether the relevant decision-making procedures and mechanisms are complete;
4Whether independent directors have fulfilled their duties and played their due role;
5Whether public shareholders have had sufficient opportunities to express their opinions and demands, and whether the legitimate rights and interests of public shareholders have been fully protected, etc.
For adjustments or changes to the cash dividend policy, detailed explanations should also be provided regarding whether the conditions and procedures for adjustments or changes are compliant and transparent.
If the company meets the conditions for implementing cash dividends but does not propose a cash dividend plan, it should provide a detailed explanation in the annual report regarding the reasons for not distributing dividends, the purposes and usage plans for the funds retained by the company that were not used for dividends.
(9) If there are instances of shareholders illegally occupying company funds, the company should deduct the cash dividends allocated to that shareholder to repay the occupied funds.