General Principles
To strengthen the management of controlling subsidiaries and protect the interests of Mousse Health Sleep Co., Ltd. (hereinafter referred to as "the Company") and all investors, this system is formulated in accordance with the Company Law of the People's Republic of China (hereinafter referred to as "the Company Law"), the Shenzhen Stock Exchange Listing Rules (hereinafter referred to as "the Listing Rules"), and the Shenzhen Stock Exchange Self-Regulatory Guidelines No. 1 for Listed Companies on the Main Board, as well as the provisions of the Articles of Association of Mousse Health Sleep Co., Ltd. (hereinafter referred to as "the Articles of Association"). A controlling subsidiary refers to a company or other entity that the Company can control or actually controls. Control here means that the investor has the power over the investee and enjoys variable returns through participation in the investee's relevant activities, and has the ability to influence the amount of returns from the investee. This system aims to strengthen the management of controlling subsidiaries, establish effective control mechanisms, conduct risk control over the Company's organization, resources, assets, investments, and operations, and improve the overall operational efficiency and risk resistance of the Company. Controlling subsidiaries shall follow the provisions of this system and, in conjunction with other internal control systems of the Company, formulate specific implementation rules based on their operational characteristics and environmental conditions to ensure the implementation and execution of this system. Controlling subsidiaries that also control other companies shall establish management systems for their controlling subsidiaries layer by layer in accordance with the requirements of this system and accept the supervision of the Company. Directors, supervisors, and senior management personnel assigned by the Company to the controlling subsidiaries are responsible for the effective implementation of this system. The Company's functional departments shall manage, guide, and supervise the controlling subsidiaries in a timely and effective manner in accordance with this system and relevant internal control systems.
Standard Operations
Controlling subsidiaries shall establish a shareholders' meeting, board of directors (or executive director), and supervisory board (or supervisor) in accordance with the law. Controlling subsidiaries shall convene shareholders' meetings, board meetings, or supervisory board meetings (if any) in accordance with their articles of association. Controlling subsidiaries must conduct major matters such as restructuring, mergers and acquisitions, investment and financing, asset disposal, and profit distribution in accordance with relevant laws, regulations, and the procedures and authority stipulated in the relevant rules of the controlling subsidiaries, and must report to the Company's board of directors for record. Controlling subsidiaries shall provide the Company's board of directors with timely, complete, and accurate information regarding their operational performance, financial status, and business prospects. After making board resolutions (or executive director decisions) and shareholders' resolutions, controlling subsidiaries shall send the relevant meeting resolutions and minutes to the Company's securities affairs department for filing within 20 working days. Controlling subsidiaries must establish a strict archive management system in accordance with the Company's archive management regulations. Important documents such as the articles of association of the controlling subsidiary, shareholders' resolutions, board resolutions (or executive director decisions), business licenses, seals, relevant government approvals, and various significant contracts must be properly kept in accordance with relevant regulations.