Limited liability company corporate governance guidelines

xLubricants Co., Ltd.

Corporate governance guidelines

preface

In order to promote the establishment of a modern enterprise system, improve the corporate governance body, and standardize the operation of the company according to law, according to the basic principles established by the Company Law and other relevant laws and regulations, refer to the standards generally accepted in other corporate governance practices, and combine These rules are formulated in accordance with the provisions of the company's articles of association and the actual company.
This standard clarifies the basic principles of corporate governance, the realization of investor rights protection, and the basic code of conduct and professional ethics that should be followed by senior management personnel such as directors, supervisors, and managers.
To improve corporate governance, the spirit set out in this Code should be implemented. The company shall formulate or revise the basic management system of the company and shall reflect the contents listed in the standard.

Chapter 1 Shareholders and Shareholders' Meeting

Section 1 Shareholders' Rights

The first shareholder, as the owner of the company, enjoys the legal rights stipulated by laws, administrative regulations and the company's articles of association. The company should establish a corporate governance structure that ensures shareholders' full exercise of their rights.

The second corporate governance structure should ensure that all shareholders have equal status. Shareholders have equal rights according to their capital contribution and bear corresponding obligations.
Article 3 Shareholders have the right to know and participate in major matters of the company as stipulated by laws, administrative regulations and the company's articles of association. Companies should establish effective channels for communication with shareholders.
Article 4 Shareholders have the right to protect their legal rights through civil litigation or other legal means in accordance with the provisions of laws and administrative regulations. The resolutions of the shareholders' meeting and the board of directors violate the provisions of laws and administrative regulations, infringe on the legitimate rights and interests of shareholders, and the shareholders have the right to file a lawsuit calling for the suspension of the above-mentioned illegal acts or violations. Directors, supervisors and managers who violate their laws, administrative regulations or the company's articles of association when performing their duties and cause damage to the company shall be liable for compensation. Shareholders have the right to request the company to file a lawsuit for compensation in accordance with the law.

Section 2 Specifications of the shareholders' meeting

Article 5 According to the provisions of the company's articles of association, the convening and voting procedures of the shareholders' meeting shall be conducted in accordance with the following rules:

1. Notice and announcement: in accordance with the “Administrative Measures on Notice and Announcement of Daqing Tongtuo Storage and Transportation Engineering Technology Co., Ltd.”, and notify all shareholders 15 days before the meeting;

2. Deliberation of the proposal: The shareholder representative fills in the proposal and submits the registration number of the secretary to the board of directors for inclusion in the meeting;

3. Voting and counting: Execution in accordance with Articles 16 and 17 of the Articles of Association;

4. The formation of the resolutions of the meeting, the minutes of the meeting and its signature: in accordance with the provisions of Article 15 of the Articles of Association.

Article 6 The board of directors shall seriously consider and arrange matters for consideration at the shareholders' meeting. The shareholders' meeting should give each proposal a reasonable discussion time.
Article 7 The company shall strictly abide by the provisions of the company's articles of association and clarify the contents of the authorization of the shareholders to the board of directors.
Article 8 The company shall, under the premise of ensuring that the shareholders' meeting is legal and effective, strengthen communication and exchange of information between shareholders through various means and means, including the full use of modern information technology.
Article 9 If the shareholders' meeting cannot convene a meeting for any reason, it may also be held by letter and voted. Both have the same legal effect.
Article 10 Where a shareholders' meeting is convened in accordance with Article 9, the secretary of the board of directors shall be obliged to ensure the legality and validity of the meeting.
Article 11 The board of directors of the company shall fully disclose the information to the shareholders before the meeting.

Section III Related Transactions

Article 12 A related transaction between the company and its affiliates shall be signed in writing. The signing of the agreement shall follow the principles of equality, voluntariness, equivalence and compensation. The content of the agreement shall be clear and specific. The company shall disclose the conclusion, change, termination and performance of the agreement in accordance with relevant regulations.
Article 13 The company shall take effective measures to prevent related parties from interfering with the company's operations by means of monopoly procurement and sales channels, and harming the company's interests. Related party transactions should follow commercial principles, and the price of connected transactions should in principle not deviate from the price or charge standard of independent third parties in the market. The company shall fully disclose the pricing basis of related party transactions.
Article 14 The assets of the company belong to the company. The company shall take effective measures to prevent shareholders and their related parties from occupying or transferring the company's funds, assets and other resources in various forms. The company may not provide guarantees to shareholders and their related parties.

Chapter II Regulations on the Behavior of Controlling Shareholders and the First Section of Controlling Shareholders

Article 15 The controlling shareholder shall focus on establishing a reasonable balance of ownership structure.
Article 16 The controlling shareholder may provide relevant business services to the company, but shall sign relevant agreements with the company in accordance with commercial principles.

Article 17 The controlling shareholder shall support the company to deepen the reform of the labor, personnel, and distribution systems, change the operation and management mechanism, establish management personnel to compete for employment, be able to go to the top, and select and hire employees, and be able to enter and exit, and income distribution can increase or decrease. Effective incentive systems.
Article 18 The controlling shareholder shall have a duty of good faith to the company and other shareholders. The controlling shareholder shall exercise the rights of the investor strictly in accordance with the law. The controlling shareholder shall not use the means of asset restructuring to damage the legitimate rights and interests of the company and other shareholders, and may not use its special status to seek additional benefits.
Article 19 The controlling shareholder's nomination of candidates for directors and supervisors of the company shall strictly abide by the conditions and procedures stipulated by laws, regulations and the company's articles of association. Directors and supervisors nominated by the controlling shareholder shall have relevant professional knowledge and decision-making and supervision capabilities. The controlling shareholder shall not perform any approval procedures for the resolution of the shareholders' meeting and the appointment of the board of directors; the senior management of the company shall not be appointed or removed by the shareholders' meeting or the board of directors.
Article 20 The major decisions of the company shall be made by the shareholders' meeting and the board of directors according to law. The controlling shareholder shall not directly or indirectly interfere with the company's decision-making and the production and business activities carried out according to law, and damage the rights of the company and other shareholders.

Section 2 Company Independence

Article 21 The controlling shareholder and the company shall be separated from personnel, assets and finance, and the institutions and businesses shall be independent, and each shall independently bear accounting and independently assume responsibility and risks.
Article 22 Company personnel shall be independent of the controlling shareholder. The manager, the person in charge of the company and the secretary of the board of directors of the company shall not hold any positions other than the directors in the controlling shareholder unit. The senior management of the controlling shareholder and the director of the company shall ensure that there is sufficient time and energy to undertake the work of the company.
Article 23 The assets invested by the controlling shareholder in the company shall be independent and complete, and the ownership shall be clear. Where a controlling shareholder invests in non-monetary assets, it shall go through the procedures for changing the property rights and clearly define the scope of the assets. The company shall independently register, establish accounts, calculate and manage the assets. The controlling shareholder shall not occupy or control the asset or interfere with the company's operation and management of the asset.
Article 24 The company shall establish and improve in accordance with the requirements of relevant laws and regulations.

Financial and accounting management systems, independent accounting. The controlling shareholder shall respect the independence of the company's finances and shall not interfere with the company's financial and accounting activities.
Article 25 The board of directors, the board of supervisors and other internal institutions of the company shall operate independently. There is no subordinate relationship between the controlling shareholder and its functional departments and the company and its functional departments. The controlling shareholder and its subsidiaries shall not issue any plans and instructions concerning the company's operations to the company and its subsidiaries, nor may it affect the independence of its operation and management in any other form.
Article 26 The company's business shall be completely independent of the controlling shareholder. The controlling shareholder and other units of its subsidiaries shall not engage in the same or similar business as the company. The controlling shareholder should take effective measures to avoid competition in the same industry.

Chapter III Directors and Board of Directors

Section 1 Director's Selection Procedure

Article 27 The company strictly abides by the provisions of the company's articles of association, fulfills the standardized and transparent selection procedures for directors, and ensures that directors are open, fair, just and independent.
Article 28 The company shall disclose the detailed information of the candidates of the directors before the shareholders' meeting to ensure that the shareholder representatives have sufficient knowledge of the candidates at the time of voting.
Article 29 A candidate for a director shall make a written commitment before the shareholders meeting, agree to accept the nomination, and promise that the information of the candidate for the director is true and complete and that the duties of the director are effectively performed after being elected.
Article 30 In the process of election of directors, the opinions of shareholders shall be fully reflected.
Article 31 The company shall sign an employment contract with the directors to clarify the rights and obligations between the company and the directors, the term of the directors, the responsibility of the directors for violating laws and regulations and the company's articles of association, and the compensation for the company's early termination of the contract.

Section II Duties of Directors

Article 32 The directors shall perform their duties faithfully, honestly and diligently in accordance with the best interests of the company and all shareholders.
Article 33 Directors shall ensure that they have sufficient time and energy to perform their due duties.
Article 34 The directors shall attend the board of directors in a serious and responsible manner and express clear opinions on the matters discussed. If the directors are indeed unable to attend the board of directors in person, they may entrust other directors in writing to vote on their behalf's wishes, and the principal shall bear the legal responsibility independently.
Article 35 Directors shall abide by the relevant laws, regulations and the company's articles of association and strictly abide by their public commitments.
Article 36 Directors shall actively participate in relevant training to understand the rights, obligations and responsibilities of being a director, familiar with relevant laws and regulations, and acquire relevant knowledge as a director.
Article 37 If a resolution of the board of directors violates the provisions of laws, regulations and the company's articles of association and causes the company to suffer losses, the directors participating in the resolution shall be liable to the company for compensation. Except for directors who have proved to have expressed objections at the time of voting and recorded in the minutes of the meeting.
Article 38 The company may purchase liability insurance for directors upon approval by the shareholders' meeting. However, the directors are responsible for violations of laws and regulations and the company's articles of association.

Section III Composition and Responsibilities of the Board

Article 39 The number and composition of the board of directors shall comply with the requirements of relevant laws and regulations, ensuring that the board of directors can conduct fruitful discussions and make scientific, prompt and prudent decisions. The company may, within the scope of laws and regulations, adjust the number of board members and personnel composition as stipulated in the company's articles of association according to the needs of the company's business development.
Article 40 The board of directors shall have a reasonable professional structure. At least one of its members shall be an accounting professional, and its members shall have the knowledge, skills and qualities necessary to perform their duties.
Article 41 The board of directors is responsible to the shareholders' meeting. The corporate governance structure should ensure that the board of directors can exercise its powers in accordance with the laws, regulations and the company's articles of association.
Article 42 The board of directors shall, in addition to earnestly fulfilling the duties stipulated by relevant laws, regulations and the company's articles of association, strengthen the management of the company's operations and perform the following duties:

1. Research and make recommendations on the company's long-term development strategy and major investment decisions;

2. It is proposed to hire or replace an external audit institution;

3. Supervise the company's internal audit system and its implementation;

4. Responsible for communication between internal audit and external audit;

5. Review the company's financial information and its disclosure;

6. Review the company's internal control system;

7. Study the selection criteria and procedures of directors and managers, review and recommend director candidates and managers;

8. Study the criteria for the assessment of directors and managers, conduct assessments and make recommendations;

9. Research and review the remuneration policies and plans of directors and senior management personnel.

The company's board of directors should ensure that the company complies with the laws, regulations and the company's articles of association, treats all shareholders fairly, and pays attention to the interests of other stakeholders.

Section IV Rules of the Board of Directors

Article 43 The company shall strictly abide by the provisions of the company's articles of association, standardize the rules of the board of directors, and ensure the efficient operation of the board of directors and scientific decision-making.
Article 44 The board of directors shall meet twice a year and convene an ad hoc meeting as needed. Board meetings should have topics that have been prepared in advance.
Article 45 The board meeting of the company shall be carried out in strict accordance with the prescribed procedures. The board of directors shall notify all directors in advance 10 days prior to the meeting and provide sufficient information, including relevant background materials for the meeting and information and data to help the director understand the company's business progress. When two or more directors of the company believe that the information is insufficient or the argument is not clear, they may jointly propose to the board of directors to postpone the board meeting or postpone the consideration of the matter in writing, and the board of directors shall adopt it.
Article 46 The minutes of the board meeting shall be complete and true. The secretary of the board of directors should carefully organize the records and organize the matters discussed at the meeting. The directors, board secretary and recorders attending the meeting shall sign the minutes of the meeting. The minutes of the board meeting shall be properly kept as important documents of the company as an important basis for clarifying the responsibility of the directors in the future.
Article 47 The board of directors authorizes the chairman of the board of directors to exercise certain parts of the board of directors during the period when the board of directors is not in session. The contents of the authorization shall be clearly defined and the contents shall be clear and specific. All matters involving the company's material interests shall be decided collectively by the board of directors.

Section 5 Independent Director System

Article 48 The company may, after the full commencement of its business operations, establish an independent director system in accordance with relevant regulations in due course.

Chapter IV Duties of the Board of Supervisors and the Board of Supervisors

Article 49 The company's board of supervisors shall be responsible to all shareholders, supervise the company's finances and the legal compliance of the company's directors, managers and other senior management personnel in performing their duties, and safeguard the legitimate rights and interests of the company and its shareholders.
Article 50 Supervisors have the right to understand the company's business operations and bear the corresponding confidentiality obligations. The board of supervisors can independently hire intermediary agencies to provide professional advice.
Article 51 The company shall take measures to ensure the supervisor's right to know and provide necessary assistance for the supervisor to perform his duties normally. The reasonable expenses required for the supervisor to perform his duties shall be borne by the company.

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Article 52 The supervisory records of the board of supervisors and the results of financial or special inspections shall be an important basis for the performance evaluation of directors, managers and other senior management personnel.
Article 53 The Board of Supervisors finds that directors, managers and other senior management personnel violate the laws, regulations or the company's articles of association, and may report to the board of directors or the shareholders' meeting, or directly report to other relevant departments.

Section 2 Composition of the Board of Supervisors and Rules of Procedure

Article 54 Supervisors shall have professional knowledge or work experience in law, accounting and other aspects. The personnel and structure of the board of supervisors shall ensure that the board of supervisors can independently and effectively supervise and inspect the directors, managers and other senior management personnel and the company's finances.
Article 55 The company shall strictly abide by the provisions of the company's articles of association and standardize the rules of procedure of the board of supervisors. The meeting of the board of supervisors shall be conducted in strict accordance with the prescribed procedures.
Article 56 The board of supervisors shall hold regular meetings and convene temporary meetings as needed. The meeting of the board of supervisors cannot be convened as scheduled for any reason, and the reasons should be explained.
Article 57 The board of supervisors may require the company's directors, managers and other senior management personnel, internal and external auditors to attend the meetings of the board of supervisors to answer questions of concern.
Article 58 The board of supervisors shall have records. The supervisors and recorders attending the meeting shall sign the minutes of the meeting. Supervisors have the right to request a descriptive record of their statements at the meeting on the record. The minutes of the board of supervisors shall be kept as important documents of the company.

Chapter V Performance Evaluation and Incentive and Constraint Mechanism

Section 1 Performance Evaluation of Senior Management

Article 59 The company shall establish fair and transparent performance evaluation standards and procedures for senior management personnel such as directors, supervisors, board secretaries, managers and financial controllers.
Article 60 The performance evaluation of directors and managers shall be organized by the board of directors or its remuneration and appraisal agency.

Article 61 The amount and method of remuneration of directors shall be decided by the board of directors to submit a proposal to the shareholders meeting. The director shall evade when the board of directors or the remuneration and appraisal agency evaluates the individual directors or discusses their remuneration.
Article 62 The board of directors and the board of supervisors shall report to the shareholders' meeting the performance of the duties of the directors and supervisors, the results of performance evaluation and their remuneration, and disclose them.

Section 2 Appointment of Managers

Article 63 The appointment of company managers shall be carried out in strict accordance with the relevant laws, regulations and the company's articles of association.
Article 64 The company shall adopt an open and transparent manner to select and hire managers.
Article 65 The company shall sign an employment contract with the manager to clarify the rights and obligations of both parties.
Article 66 The appointment and dismissal of a manager shall be performed in accordance with the statutory procedures and reported to the relevant registration authority for registration.

Section III Incentive and Constraint Mechanism of Managers

Article 67 The company shall establish an incentive mechanism for the management staff's remuneration to be linked to the company's performance and personal performance.
Article 68 The performance evaluation of managers by the company shall be the basis for determining the salary of managers and other incentives.
Article 69 The salary distribution plan for managers shall be approved by the board of directors, explained to the shareholders' meeting, and disclosed.
Article 70 The company manager shall strictly abide by the duties stipulated in the company's articles of association. If the manager violates the laws, regulations and the company's articles of association and causes the company to suffer losses, the company's board of directors shall actively take measures to pursue its legal responsibility.

Chapter 6 Stakeholders

Article 71 The company shall respect the legal rights of banks and other creditors, employees, consumers, suppliers, communities and other stakeholders.
Article 72 The company shall actively cooperate with stakeholders to jointly promote the sustainable and healthy development of the company.
Article 73 The company shall provide the necessary conditions for safeguarding the rights and interests of stakeholders. When its lawful rights and interests are infringed, the stakeholders shall have the opportunity and means to obtain compensation.
Article 74 The company shall provide the necessary information to the stakeholders so that they can make judgments and make decisions on the company's operating conditions and financial status.
Article 75 The company shall encourage employees to communicate directly with the board of directors, the board of supervisors and managers to reflect their opinions on the company's operations, financial status and major decisions concerning the interests of employees.
Article 76 While maintaining the company's sustainable development and maximizing the interests of its shareholders, the company should pay attention to the welfare, environmental protection and public welfare undertakings of its communities and attach importance to the company's social responsibilities.

Chapter VII Information Disclosure and Transparency

Section 1 Continuous Disclosure of the Company

Article 77 The continuous disclosure of information is the responsibility of the company. The company shall disclose the information in a true, accurate, complete and timely manner in strict accordance with the laws, regulations and the company's articles of association.
Article 78 In addition to disclosing information in accordance with mandatory regulations, the company shall promptly and promptly disclose all information that may have a material impact on the decisions of shareholders and other stakeholders, and ensure that all shareholders have equal access to information.
Article 79 The information disclosed by the company shall comply with the regulations of the relevant administrative organ and be easy to understand. Companies should ensure that users have access to information in an economical and convenient manner.
Article 80 The secretary of the board of directors of the company is responsible for information disclosure, including establishing an information disclosure system, receiving visits, answering inquiries, contacting shareholders and relevant regulatory agencies, and providing investors with publicly disclosed information. The board of directors and managers should actively support the work of the board secretary.

Section 2 Disclosure of Corporate Governance Information

Article 81 The company shall disclose relevant information on corporate governance in accordance with laws, regulations and other relevant regulations, including but not limited to:

1. The personnel and composition of the board of directors and the board of supervisors;

2. The work and evaluation of the board of directors and the board of supervisors;

3. The opinions of the board of directors and the board of supervisors on matters such as related party transactions, appointment and dismissal of directors and senior management personnel;

4. The actual situation of corporate governance, and the differences with the guidelines and their causes;

5. Improve specific plans and measures for corporate governance.

Section III Disclosure of shareholders' equity

Article 82 The company shall promptly disclose the detailed information of the company's investors in accordance with relevant regulations.
Article 83 The company shall promptly disclose the changes in the company's capital contribution and other important matters that may cause changes in capital contribution.
Article 84 When the controlling shareholder of the company increases or decreases the company's capital contribution or pledges the company's capital contribution certificate, the company and its controlling shareholder shall promptly and accurately disclose relevant information to other shareholders.

Chapter VIII related responsibilities

Article 85 The company and its subordinate departments shall strictly abide by the provisions of the Guidelines and standardize the operation and management actions. In case of violation of the provisions of this Code, the company shall promptly correct it, thus causing losses to the company, the company

The parties should be held accountable. If a criminal law is violated, it shall be sent to the judicial organ for criminal responsibility.

Chapter IX Supplementary Provisions

Article 86 These Standards shall be implemented as of the date of promulgation.

Article 87 The interpretation of this Code belongs to the board of directors of the company.