Zhejiang Huace Film & TV Co., Ltd. Subsidiary Management System
Chapter 1 General Provisions
Article 1 To strengthen the management and control of Zhejiang Huace Film & TV Co., Ltd. (hereinafter referred to as the "Company" or "this Company") subsidiaries, standardize the Company's internal operating mechanisms, and protect the legitimate rights and interests of the Company and investors, in accordance with the "Company Law of the People's Republic of China" (hereinafter referred to as the "Company Law"), the "Securities Law of the People's Republic of China," the "Listing Rules of the ChiNext Market of the Shenzhen Stock Exchange," the "ChiNext Market Listed Company Self-Regulatory Guidelines No. 2 - Standardized Operation of ChiNext Listed Companies," and other laws, regulations, and normative documents, as well as the "Articles of Association of Zhejiang Huace Film & TV Co., Ltd." (hereinafter referred to as the "Articles of Association"), and in conjunction with the Company's actual situation, this System is hereby formulated.
Article 2 For the purposes of this System, "subsidiary" refers to a company legally established by the Company based on its development strategy planning and the need to highlight its main business and enhance its core competitiveness, possessing independent legal person status. This includes: (1) Wholly-owned subsidiaries established solely by the Company; (2) Subsidiaries jointly funded by the Company and other companies or natural persons, where the Company holds more than 50% equity, or where the Company's equity is less than 50% but it can determine the composition of more than half of the board of directors, or where the Company can actually control the subsidiary through agreements or other arrangements. Participating companies that have a significant impact on the Company shall generally refer to the relevant provisions of this System for implementation.
Article 3 The chairman of the subsidiary (or the executive director) shall strictly implement this System and shall perform management, guidance, and supervision duties in a timely and effective manner in accordance with this System.
Chapter 2 Basic Principles of Subsidiary Management
Article 4 The Company strengthens the management and control of its subsidiaries, aiming to establish effective control mechanisms, manage risks related to the Company's governance structure, assets, and resources, and enhance the Company's overall operational efficiency and risk resistance capabilities.
Article 5 In accordance with the requirements of national laws, regulations, and normative documents for standardized operations and asset control, the Company, as the controlling shareholder, exercises its right to supervise major matters of its subsidiaries, enjoys the right to investment returns and major decision-making of invested enterprises. At the same time, it has the obligation to guide, supervise, and provide related services to its subsidiaries.
Article 6 The development strategy and planning of subsidiaries must be subordinate to the overall development strategy and planning formulated by the Company, and they must implement the Company's various system regulations for its subsidiaries.
Article 7 Subsidiaries shall establish corresponding business plans and risk management procedures in accordance with the Company's business strategies and risk management policies.
Article 8 Subsidiaries shall promptly submit their board resolutions, shareholder resolutions, and other important documents to the Company's Board Secretary.
Chapter 3 Establishment of Subsidiaries
Article 9 The establishment of subsidiaries (including becoming a subsidiary of the Company through mergers and acquisitions) must comply with national laws and regulations, national development plans and industrial policies, the Company's development strategy and planning, the Company's layout and structural adjustment direction, highlight the main business, enhance the Company's core competitiveness, and prevent blind expansion and other non-standard investment behaviors.
Article 10 The establishment of subsidiaries or becoming subsidiaries of the Company through mergers and acquisitions must undergo investment feasibility studies by the Company and be approved through the reporting and decision-making procedures within the scope of authority stipulated in the Company's "Management System for External Investments."