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Role, Functions and Powers


1.Role

The Board of Supervisors reports to the general meeting of shareholders. The Board of Supervisors shall supervise the legality of the Company’s finance and the performance of duties by the Company’s directors, President, Vice President(s), Chief Financial Officer, and Secretary of the Board of Directors, and safeguard the legitimate rights and interests of the Company and shareholders.

The Company shall take measures to protect the supervisors’ right to information and timely provide necessary information and materials to the supervisors, so that the Board of Supervisors can effectively supervise, inspect and evaluate the Company’s finance, operations and management. The President shall, according to the requirements of the Board of Supervisors, report on the signing, implementation, fund use, profit, and loss of the Company’s major contracts to the Board of Supervisors, and the President shall ensure the truthfulness of the report.

If the Board of Supervisors finds that directors, managers, or other senior members of the management violate laws, regulations, or the Articles of Association, it can report to the Board of Directors and the general meeting of shareholders, or directly report to the securities regulatory authority and other relevant departments.


2.Functions and powers

The Board of Supervisors shall exercise the following functions and powers in accordance with law:

1)to review the Company’s financial situation;

2)to exercise supervision over acts of the directors and senior management while performing corporate responsibilities in accordance with laws, regulations, and the Company’s Articles of Association and appendices, and to advise on dismissal of directors or senior members of the management who have breached laws, administrative rules, the Company’s Articles of Association and appendices, or resolutions of the shareholders’ general meetings;

3)to demand the directors or the senior management rectify errors if they act in a manner harmful to the Company’s interests;

4)to verify and inspect the financial information such as financial reports, business reports, and profit distribution plans to be submitted by the Board of Directors to the shareholders’ general meetings; to authorize, in the Company’s name, certified public accountant and auditors to assist in the review of aforementioned information and inconsistencies arising therein; and to examine and opine in writing on the periodic reports of the Company prepared by the Board of Directors;

5)to propose to convene an extraordinary general meeting of shareholders and convene and preside over the general meeting of shareholders if the Board of Directors fails to perform its duties of convening and presiding over the general meeting of shareholders as stipulated in the Company Law of the People’s Republic of China;

6)to make proposals in a shareholders’ general meeting;

7)to propose to convene an extraordinary board meeting;

8)to represent the Company in negotiations with or in taking legal action against directors or senior members of the management;

9)to investigate abnormalities in operation of the Company; if necessary, to engage accounting firms, law firms and other professional institutions to assist its work, the expenses of which shall be borne by the Company;

10)other functions and powers as stipulated by the Company’s Articles of Association and Rules of Procedure of the Board of Supervisors.